According to an analysis of S&P Global, copper supply shortages could become a major destabilizing factor for international security in the 21st century.
Copper is a material widely used in industry and construction. So, Its price is considered an indicator of economic activity. When the economy is expanding, Copper demand tends to increase. While, When the economy contracts, Demand decreases.
Being the material conductor more used, Copper is essential for all energy transition plans. As the energy transition intensify, The potential gap between supply and demand is expected to be very large.
The replacement and recycling of copper conductors will not be enough to meet the demand for Energy transmission cables used in large quantities in electric vehicles, Electric infrastructure and renewable energy generation.
Copper currently faces various risks, Like geopolitics, High inflation, The Covid-19 epidemic, the slowest adoption of the expected of green technologies and the replacement of industrial metals. Copper scarcity will exert unprecedented pressure on the supply chain.
The new copper mines developed in Chile, Peru, Mongolia and Central Africa will contribute an additional copper supply, trend that will be maintained until 2024. Chile and Peru, for example, together they represent approximately 2/5 of the world copper offer and 1/3 of reserves. Nevertheless, They have also demonstrated the instability of regulation. This has made the possible project promoters and asset owners doubt.
According to Bloomberg's forecasts, The global growth of copper mines will be elevated in 2021-2023. In 2021, 2022 Y 2023 Growth of the 4,32%, 2,75% Y 3,19% respectively. In terms of real production, The incremental release of copper mines in 2021 is much less than expected. According to previous estimates, The world copper mine was expected to increase its production in 916.000 tons in 2021, With a growth rate of 4,32%.
Nevertheless, Real statistics only increased production in some 550.000 tons, With a growth rate of 2,7%. The main reasons are the epidemic, strikes and other factors that affected minerals.
S&P indicates in its report that the objective of achieving zero net emissions in 2050 It will not be fulfilled unless new copper supplies occur on time. According to the company, Copper demand is expected to pass 25 millions of current tons to some 50 million in 2035. This record level will continue and continue to grow to reach the 53 million tons in 2050.
The report predicts the gap between the supply and world demand for long -term copper. This will begin in the middle of the century and will have serious consequences for the world economy and affect the calendar to achieve the zero net emissions in 2050.