Copper Market to Reach a Value of US$298 Billion by 2030

As the electrification of several industries is accelerating, industry experts are worried that the supply of minerals critical for the energy transition would not be sufficient to keep up with the rising demand. In this scenario, copper is one of the minerals that may become a scarce resource. However, some analysts believe the market has the potential to grow in size by 2030. 

Currently, the copper market is experiencing a turbulent period ahead as the world is undergoing a copper shortage due to supply chain challenges in South America amid higher demand. The main driver of instability in the market is the political crisis in Peru after former President Pedro Castillo was ousted in an impeachment trial in December, which lead to a series of nationwide protests. Peruvian political stability is important for the market as it accounts for 10% of the world’s copper production. “Anytime there is political unrest this has a whole range of effects and the obvious one is the potential for mining sites to have to close,” said Robin Griffin, Vice President of Metals and Mining, Wood Mackenzie.

Similarly, Chile, the world's largest copper producer, is expected to reduce its copper production, according to Goldman Sachs. The country, which accounts for 27% of the world's copper production reported a year-on-year decline of 7% in November 2022.

Another factor that will boost demand in the short term is the reopening of China, which is relaxing its COVID-19 measures. Commodities prices have been reporting gains since the country announced the lifting of strict distancing measures in December 2022.

Electrification will be one of the main factors that will boost copper demand in the long term. According to experts, electric vehicles (EVs) will play an important role, as will the required infrastructure to facilitate their use. “You cannot see EVs take off before you get the charging infrastructure, and electrification, which is necessary, is actually more copper intensive,” said Tina Teng, Market Analyst, CMC Markets. 

According to Report Linker’s latest copper report, the global copper market reported a value of US$170.6 billion in 2022, which is projected to reach a size of US$298.4 billion in 2030, a 7.2% compound annual growth rate. 

The report also highlights the Chinese importance of copper demand as it is forecasted to hold a market size of US$68.4 billion in 2030, reporting a compound annual growth rate of 11.5% over the 2022-2030 period. Other important drivers include Japan with 4.2% growth, Canada with 5.9% and Germany with 5.4%.