Copper prices were on a roller-coaster ride in 2021 as exporters scrambled to find containers to move the commodity.According to S&P Global Platts analyst Lu Han, logistics challenges impacted the market significantly, thanks to the global shortage of containers. The recovery in demand in the US and Europe, as well as ongoing Covid-19 disruptions and power cuts in China, all contributed to the price f luctuations.Whilst the global refined copper market is expected to be in a significant surplus in 2022, following a small supply deficit in 2021, global demand for the essential component in manufacturing electric vehicles (EVs) and consumer electronics is expected to outstrip supply by more than six million tonnes by 2030.According to Rystad Energy projects, a deficit of this magnitude will have wide-reaching ramifications for the energy transition as there is currently no substitute for copper in electrical applications. Significant investment in copper mining is therefore required to avoid the shortfall.“Copper demand is projected to rise 16% by the end of the decade, reaching 25.5 million tonnes per annum (tpa) by 2030, compared with a supply forecast showing a 12% decrease versus 2021 levels. Estimates based on current and expected projects show supply will clock in at 19.1 million tpa, falling well short of the quantity needed to meet demand,” reads a Rystad Energy report on the outlook for copper. Investment in copper mining is also seen as risky as current operations are near peak capacity due to ore quality and reserves exhaustion, exerting upward pressure on production costs and emissions. However, copper prices are currently high, which could encourage investors to accept a greater level of risk.“Lacklustre investments in copper mining are stumping supply, as the pandemic-driven market instability encourages investors to hold on to their capital. As the energy transition continues at pace and EV adoption grows in populous nations like China and India, the copper mining industry requires significant investment to keep up with demand,” said James Ley, global energy metals expert with Rystad Energy.The growing renewables and EV markets have pushed copper demand higher, causing prices to soar. Prices have risen 70% during the pandemic.
