Copper demand set to soar 75% by 2050, Wood Mackenzie warnsBy...

Copper demand set to soar 75% by 2050, Wood Mackenzie warnsBy Colin Hay - August 21, 2024The price of copper continues to rebound on news of a potential increase in Chinese stimulus measures and an increasing belief that the US Federal Reserve will soon start cutting rates.Copper hit US$4.22 per pound overnight and is expected to trade at around US$4.35/lb by year-end.The long-term forecast for copper demand, the third most widely used metal in the world, is staggering.Major investment neededAccording to a new report by global resource research firm Wood Mackenzie, demand for copper is expected to rise 75% to 56 million tonnes by 2050.Wood Mackenzie says this dramatic demand jump will necessitate substantial investment.It has also warned, however, that as major global economies look to cut China out of their supply chains, the resulting inefficiencies could increase the cost of finished goods and delay the energy transition.Global powerhouseChina is the global powerhouse and clear leader in copper mining, downstream processing and semi-manufacturing.Wood Mackenzie says shifting away from the Asian giant will require massive investments in new copper processing and fabrication facilities.According to Wood Mackenzie’s Securing copper supply: no China, no energy transition study, replacing China’s smelting and refining capability to meet the rest of the world’s demand would alone require nearly $126 billion.The new report found that China has accounted for 75% of global smelter capacity growth since 2000 and currently controls 97% of global smelting and refining capacity, contributing over 3Mt of production and nearly $37b in investment.Increased capacityThe country has also added nearly 11Mt of copper and alloy capacity since 2019, representing around 80% of global additions.Approximately two-thirds of these facilities produce wire rods, giving China half of the world’s fabrication capacity, with further expansion underway.“A scenario without China for the copper supply chain would require a substantial increase in processing capacity to meet energy transition targets,” Wood Mackenzie’s Nick Pickens said.“Based on our projections, there will be an additional 8.6Mt of copper demand outside China over the next decade, [which] represents 70% of smelter capability and 55% of fabricator capacity in the rest of the world.”“As governments and manufacturers aim to diversify away from China, it is crucial to consider the entire supply chain, not just mining operations.”Smelting landscapeThe report also highlights significant shifts in the global copper smelting landscape, with new facilities outside Ch