Global consumption of total and refined copper
Global total and refined copper consumption will grow at a compound annual growth rate of 2.4% and 2.2%, respectively, between 2022 and 2032, according to Wood Mackenzie projections.
This in turn puts increasing pressure on producers to begin development of the next stage of projects.
Wood Mackenzie believes that copper’s role will only intensify thanks to decarbonization and the «greening» of the economy.
For now, the expected increase in demand for various raw materials due to the easing of restrictions by COVID-19 and the reopening of the economy in China in December 2022 has turned out to be much less pronounced than expected.
From a World Trade Organization (WTO) perspective, this outcome has been particularly relevant for the minerals and metals commodity group, for which Chinese demand accounts for approximately half of total world demand.
Specifically, the decline in metal prices observed during the 12 months to May 2023 is largely due to the ongoing financial challenges facing the Chinese real estate sector, which accounts for a significant portion of global demand for industrial metals.
Copper
To partially offset this comparative shortfall in demand, the Chinese authorities have engaged in heavy government spending on infrastructure projects.
The WTO reports that this has helped sustain demand for commodities such as copper and iron ore, whose price declines of 12 percent and 20 percent, respectively, would have been much steeper without the increase in global demand caused by this spending.
In one of its main uses, copper is needed for electrification and equipment manufacturing.
According to Ivanhoe Electric Company, in developing areas, copper consumption occurs mainly in the form of infrastructure construction and the manufacture of equipment and electronic products.
In developed areas, consumption is often driven by infrastructure replacement or upgrades and equipment manufacturing. The drive towards electrification increases demand for copper as a result of increased power generation, transmission and consumption.
