Global copper production to surge in 2021 after two sliding years, says ICSG
THE INTERNA TIONAL COPPER STUDY GROUP (ICSG) says following a slip of 0.2 per cent in 2019, it is projecting that global copper mine production will decline by about 1.5 per cent in 2020, before recovery and rising by about 4.5 per cent in 2021.
In its copper market forecast for the 2020-21 season, the ICSG call was as anticipated, as it marks 2020 as a consecutive year the red copper will be hit with a production decline.
The forecast is in concord with estimates from Colin Hamilton, managing director and commodity analyst of a mining analyst BMO Capital Markets.
The London-based analyst had earlier projected a 1.7 per cent reduction of worldwide copper mine production in 2020, with production rising by 4.1 per cent the following year.
According to ICGS, the downward slope in 2019 production was due to operational issues, particularly in Indonesia, one of the top 10 highest copper producing countries.
However, this year’s production fall is due primarily to temporary mine closures caused by the Covid-19 pandemic, most notably in Peru, the second highest producer of the red metal.
ICSG forecasts also projects that global copper demand excluding China will decrease by nine per cent in 2020, mainly due to pandemic-related lockdowns. The group noted that this is due to anticipated fall in demand of eight per cent and six per cent in the European Union and the United States, respectively. Significant reductions are also expected in India, Japan, and several countries in Southeast Asia.
ICSG further estimates a deficit of about 50,000 tonnes of copper in 2020 but optimistic a surplus of about 70,000 tonnes will be achieved in 2021.
Lower copper production in 2020, however, will be partially offset by additional output from newly commissioned mines, ICGS said, including Russian Copper Company’s Tominskoye mine and the Deziwa copper-cobalt mine in the Democratic Republic of the Congo (DRC), which resumed production in January.
On a positive note, the Portugal based international group disclosed that additional output from new projects, including Tominskoye in Russia and Deziwa in the Democratic Republic of Congo coupled with that from ramp-up mines such as Cobre de Panama, South America and a significant recovery in Indonesian output will partially offset the reductions caused by the pandemic.
Looking ahead to 2021, ICGS stated that output is expected to benefit from a recovery from the constrained operating levels of 2020 and increased supply resulting from the ramp-up of recently commissioned mines and expansions as well as from the planned start-up of larger projects, including Kamoa Kakula in the Democratic Republic of Congo, Africa’s top copper mining country, the Spence sulphide project in Chile, the world’s highest copper producer and Lone Star project in Maine, Norway.