BHP Hopes Copper Market to Take-Off by Mid-2020s

SEATTLE (Scrap Monster): Leading copper producer, BHP, foresees further weakness in copper prices over the medium term. The price outlook was provided alongside the announcement of the full year 2021 results.

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The red metal had witnessed strong recovery from the 20-month lows recorded in July this year. This was mainly on hopes that he worst of the Chinese slowdown was over. So far this year, copper prices have registered decline by almost one-fifth. Based on the current situation, BHP expects copper market to take-off by mid-2020s, if not earlier. It predicts significantly better prospects from the mid-to-late 2020s.

According to BHP, the global copper market is expected to remain well-supplied, mainly on account of additional tonnage from new projects and expansion in Central Africa, Peru, Chile and Mongolia coming onstream through 2024. BHP expects its own copper production to see 4-16% surge over the next one-year period.

Meantime, BHP lists out a number of factors in support of elevated copper prices, such as grade decline, resource depletion, water constraints and lack of high-quality future development projects. The anticipated grade decline alone could easily remove approximately 2 million tonnes per annum of mine supply by the end of the current decade, BHP notes.