By an end of this decade, according to BHP’s CEO, the metal industry may be in deficit.
The world’s biggest miner predicts that by the end of this decade. The copper market could be in deficit as the energy revolution quickens and the metal has become more difficult to mine.
The threat is there will be “a mismatch between the timing of demand increases and when supply gets to meet that demand.” Mike Henry, chief executive officer of BHP Group Ltd., said during a Financial Times mining event in London on Friday.
This seems to be despite the fact that there are sufficient reserves of copper & other metals essential to decarbonization, including such nickel and lithium.
Henry’s remarks follow a rough few months for copper. Which serves as a gauge of economic activity due to its wide range of uses in everything from infrastructure to transmitting power.
Although the role that the metal plays in clean energy makes miners & governments nearly universally optimistic about the metal’s long-term future, prices have dropped by approximately 30% from the historic highs set in March as the economy has slowed in the face of higher interest rates.
Bintas from Trafigura issues a warning about the impending strain on the copper supply.
The Decline of Copper Portends a Painful and Prolonged Metals Shortage.
Prior to tightening up towards the end of the decade as easier to reach. Deeper deposits of a metal become harder to discover and mining becomes more challenging. Henry predicted that the market would be in “a little bit of surplus” in the coming years.
In terms of water conservation, community involvement. And wider environmental approvals, he added, “There are additional issues that have to be addressed.” “These processes are requiring more time. They are more intricate.
Kosta Bintas, co-head of metal and mineral trading at Trafigura Group, stated at the event on Thursday. That the energy transition & limited supplies will lead to a recovery in copper prices, to stockpiles expected to fall to fewer than three days of world demand by year’s end.
According to Freeport-McMoRan Inc. CEO Richard Adkerson, copper prices don’t really represent a “remarkably tight” real market.