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The Copper imbalance of supply and demand in 2021

Large copper stockholder and manufacturer in the UK

Week commencing: 12/07/2021             Issue: 13

Copper is a commonly used metal throughout the world and demand for this important commodity is rising among a tight supply. It has been suggested that higher Copper prices are required for mining companies to invest in Copper production and exploration to match demand. Senior Copper analysts further state that mine supply response will be required to meet this new area of demand growth and a high Copper price will be essential to encourage the new production into the market.

What has happened to Copper supply?

The imbalance of the Copper supply and demand factors has already sparked decade highs, pushing the Copper price to an all time high in May 2021. Since the record-breaking Copper price emerged, the price of Copper has since pulled back, however the industry leaders suggest that there are high amounts of expectation that Copper is entering a bull market.

A combination of surging demand and uncertain supply lead to a large and open-ended supply deficit, so there could be some ambiguity before the supply gap settles effectively. Currently the world consumes 50 million tonnes of Copper per year and by the year 2050 the world will need to produce 60 million tonnes of Copper per year, highlighting the increased requirement for a stable and consistent Copper supply. Furthermore, the shares of many mining companies have doubled in the past year, as policy supports measures in advanced economies in response to the COVID-19 pandemic fueled inflation.

Where is the current Copper demand coming from?

The demand for Copper is generated from a varied range of industries, such as the electrical and construction industry, due to the range of benefits and properties the metal offers. It is suggested that Copper is going to be a key metal to build the infrastructure that will deliver renewable, lower-carbon energy to end users.

Demand for Copper is coming from numerous factors and the transition to green energy is fast becoming one of the key themes for the global economy this year and the future, creating an increased demand for Copper. It is suggested that the demand profile for Copper will change and the industries in need for Copper will broaden. Sources claim that China will significantly dominate global renewables growth over the coming decade, representing approximately 42% of global renewable installations within the next 10 years. Furthermore, developed countries, such as Germany and Spain, could experience an elevated Copper consumption growth rates due to new renewable implementations.

Supply & Demand of Copper

How can ILF help you?

ILF continue to deliver customers with the best available supply of Copper and other non- ferrous metals, ensuring customers’ demands are being met and our inventory levels remain high. We are excited to meet the demands of existing and new industries who require a Copper supply and playing a role in future proofing the world as we take on exciting projects.

Have you had an increase of demand? If you have, we would love to hear from you and provide you with a solution.

ILF Milly Edwards

Sales and Marketing Executive: Responsible for creating content for ILF's social media channels, website, print media and promotional work.

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