Global Copper Surplus to Worsen on Market Disruptions

SEATTLE (Scrap Monster): The latest report published by the International Wrought Copper Council (IWCC) suggests further worsening of copper glut over the next 18-month period. This is mainly on account of growing uncertainty in factors ruling demand and supply of the metal due to ongoing market disruptions.

As per IWCC forecast, the supply of the metal is expected to surpass demand by 285,000 tonnes in 2020, primarily aided by Covid-19 related disruptions during the initial quarter of the year. Furthermore, the copper glut is expected to rise further to touch levels of 675,000 tonnes next year.

The shutdowns as well as production curtailments at several mines coupled with bleak economic growth projections have badly impacted the supply and demand of copper. Incidentally, the metal prices had recently hit the lowest level since January 2016, with 3-month LME copper futures dropping to new lows of $4,371 per tonne.

The copper demand is likely to witness 5.4% year-on-year decline this year to 22.625 million tonnes. However, the industry body foresees 4.4% rebound in demand to 23.625 million tonnes in 2021. Meantime, refined copper production is expected to climb higher from levels of 22.91 million tonnes in 2020 to 24.3 million tonnes in 2021.

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The above estimates by IWCC are based on inputs from the International Copper Study Group (ICSG) and information available publicly.