Global copper and aluminum supply deficits may cause prices to soar within a few years while steel may drop, according to a new report on metals.
A 5.4-million-ton (4.9-million-tonne) copper supply shortfall by 2027 may push prices up by 20% to US$9,800 per ton from around US$8,200 per ton this year, Bloomberg New Energy Finance, a unit of the newswire company, says in its Industrial Metals Outlook 2H 2023: Heading into the storm.
Global annual demand for copper is forecast to rise by 2.6% from last year’s levels to 29.8 million tonnes by 2027 as the green energy transition to more electricity in transport and industry bites into supplies, the report shows. Copper supplies are expected to increase by 10% over the period to 24.4 million tons.
Likewise, it projects a 30.7-million-ton aluminum shortfall despite a 10% production increase over the same period. That could see prices hit US$3,000 per ton in 2027 from US$2,200 per ton this year – a 36% hike, according to the report authored by Kwasi Ampofo. It projected that pressure on energy costs and emissions could boost aluminum recycling efforts to feed 82% of supply by 2028.
“As global investment flowing into renewable energy breaks records, the expansion of energy transition-related manufacturing, from solar panels to power grids to electric vehicles, presents new hope for industrial metals demand,” Ampofo said in the report. “The increasing range of available EV models and technology improvements could further strengthen consumer appetite.”
In 2027, aluminum demand is projected to hit 108.2 million tonnes, as lightweight aluminum replaces heavier steel in vehicles and in electricity grid infrastructure, according to the report.