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Copper Deficit To Reach 4 Million Tons By 2030, Analyst Predicts: Mining, Electrification Plays Set To Benefit
Copper Deficit To Reach 4 Million Tons By 2030, Analyst Predicts: Mining, Electrification Plays Set To Benefit
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Despite the global copper market’s looming long-term supply deficit, talk of substitution as a savior is more smoke than fire, according to JPMorgan . While concerns about copper being swapped out for cheaper materials have been frequent, Jones notes, “Substitution & thrifting could accelerate over the medium term, especially in newer technologies such as xEVs and renewables, we do not believe it will be sufficient to fill the long-term market deficit.”Why It Matters: No Escape From DeficitsThe energy transition has put copper in the spotlight, with demand surging due to its vital role in electric vehicles (EVs) and renewable energy infrastructure.As Jones highlights, “xEVs typically contain 2-4x as much copper as Internal Combustion Engine vehicles,” which positions copper as a vital component for future technologies. Even though improvements in battery technology could reduce copper intensity in EVs, growing vehicle size and battery density are likely to offset these gains.The China ConundrumChina, responsible for over half of global copper demand, poses a unique challenge when it comes to substitution. “In power generation, we do not expect significant further aluminum adoption in thermal power generation or offshore wind, given technological constraints and significant substitution has already occurred in onshore wind,” Jones says.Although could see increased use, safety concerns and regulatory hurdles remain significant barriers to its broader adoption in other areas.Jones also emphasizes the importance of copper recycling: “Now that historic copper networks are being replaced, this ‘urban mining' could release material copper scrap supply by 2030.”Mining Plays To WatchJPMorgan remains positive on long-term copper prices and equity exposure. In North America, Jones favors Teck Resources Ltd NYSE:TECK, while in Europe, he highlights Lundin Mining Corp OTC:LUNMF for its “re-rating potential and de-risked growth pipeline.” In APAC, Sandfire Resources America Inc OTC:SRAFF, Zijin Mining Group Co Ltd OTC:ZIJMF, and CMOC Group Ltd OTC:CMCLF are top picks, with Rio Tinto PLC NYSE:RIO and Anglo American PLC OTC:AAUKF OTC:NGLOY being key diversified miners deriving over 20% of their EBITDA from copper by 2025.Jones remains cautious, however, on miners with “more expensive valuations and more idiosyncratic risks,” including Antofagasta PLC OTC:ANFGF, Southern ...