Mining giant: Copper concentrate supply will be tight in 2024
On February 20, BHP Billiton, the world's largest mining company, announced its financial report for the first half of the fiscal year. The interim results as of December 31, 2023 show that as demand for iron ore and other core commodities remains strong, BHP Billiton's revenue in the first half of the fiscal year increased by 6% year-on-year to US$27.232 billion; however, due to nickel asset impairment and other Due to the impact of provisions, BHP Billiton's net profit in the first half of the fiscal year fell 86% year-on-year to US$972 million.
BHP Billiton also recently stated that given current market conditions, the refined copper market is expected to experience a shortage, and by 2024, the supply of copper concentrate will become extremely tight. This prediction has attracted market attention to the future development of the copper industry.
Niu Qiule, a researcher at the Founder Medium-Term Nonferrous and New Energy Metals Research Center, told reporters that although the TC of imported copper ore has recently been below US$30/ton, it has dropped significantly from the previous high of more than US$90/ton, reflecting the market's response to the Panama mineral rights dispute and Chile's The market is concerned about future supply disruptions after the strike, but global copper mine production is still expected to grow by 3.7% in 2024.
He said that behind the rapid growth of mines is not only the launch of new mines and the expansion of old mines, but also the increase in copper mine production in countries that face operational restrictions in 2023, including Chile, China, Indonesia, Panama and U.S.
Jiang Lu, chief analyst of CITIC Futures Industrial Products Group, said that the copper supply and demand pattern is expected to shift from tight balance to slight excess in 2024. The growth rate of copper supply will slow down slightly in 2024. The tightness of concentrates is mainly related to the disruption of overseas mine suspensions, while the supply of refined copper is expected to remain loose.
In terms of copper mines, if the neutral assumption is that the Cobre copper mine resumes production in the middle of this year, global copper mine production will increase by approximately 720,000 tons. Among them, the expansion of old mines and mine projects approaching production in 2024 can contribute about 570,000 tons of new increment; while the new increase brought by reconstruction projects is about 170,000 tons.
In terms of refined copper, the world is expected to add 1.332 million tons of new production capacity in 2024. The advantages of smelting capacity are concentrated in Asia, with a contribution ratio of as high as 61%, mainly in China, Japan, and India.
But so far, he said that domestic copper concentrate TC has stabilized at a historical low of US$30/dry ton. Amid the contradiction between excess domestic smelting capacity and tight supply of overseas copper mines, it is expected that domestic refineries may reduce production shutdowns and advance maintenance plans in the first half of this year. , there are restrictions on the acceleration of annual refined copper production.
Niu Qiule said that global copper demand will face complex risks and opportunities in 2024. Geopolitical conflicts, global economic slowdown, high interest rate environment, weak post-epidemic recovery and other factors may suppress traditional demand for copper, especially the important impact of the downturn in China's construction industry on global copper consumption.
However, the rapid development of new energy fields, including increased copper demand for electric vehicles, renewable energy, power transmission and distribution networks, heralds the potential growth of the copper market in the future and will form a gap that is difficult to fill in a few years.
Jiang Lu predicts that in terms of traditional consumption, power infrastructure consumption will continue to play an important supporting role in 2024, while home appliances and transportation consumption may be weaker than in 2023, and weak electronic consumption is expected to improve; in terms of emerging consumption, new energy and wind and solar demand will increase in 2024 It is expected to remain the foundation for maintaining the resilience of copper consumption.
"Although there are challenges in the short term, demand growth in emerging areas is expected to provide strong support for the copper market. We expect global refined copper consumption to grow by 2.7% to 27.066 million tons in 2024." Niu Qiule finally predicted.
