The copper market is expected to tighten in the second half of the year and to be in balance or in a slight deficit for the full year, as per copper producer Antofagasta. From 2019 the likelihood of the market being in deficit is expected to increase as mine supply continues to be affected by the long-term trend of grade decline and lack of new investment. Given the lead time between the decision to proceed with the construction of a reasonable-sized mining operation and it coming into production, the few projects that have been approved or are awaiting the final stages of permitting are only expected to come on-stream in the next decade. In addition, there are an unusually large number of labour negotiations taking place in Chile and Peru during 2018. With the backdrop of stronger copper prices, employee expectations may be raised which could result in some supply disruptions in the region. On the demand side, growth will continue to be driven by Chinese consumption, but the rise in demand from electric vehicles and renewables will be significant if they develop at the rates many analysts are expecting.
Updated On 10-Apr-2018
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