The giant mines, which are currently under construction, will produce an additional 1 million tons of copper by 2023, but this will not be enough to completely close the expected gap between supply and demand in the next few years.
Industry analysts and executives coming to Santiago this week to attend the Cesco conference, which is one of the biggest events in the industry, are set to increase: a key indicator of semi-finished copper ore market, known as concentrates, points to the busiest market in more than five years , and banks and brokers, such as Morgan Stanley and Macquarie Group Ltd., rank the metal as one of their top picks.
“We are looking at a classic resource cycle,” said Colin Hamilton, managing editor for commodities at BMO Capital Markets. “Now no one has copper when it is needed, but everyone has projects for 2022-2023 - perhaps after we had to make some kind of replacement.”
Copper futures traded in New York reached their highest level in the last three years at the end of 2017. Shortly thereafter, large copper projects, which were suspended after a recession in 2016, moved into the construction phase.
Anglo American Plc began construction of its Quellaveco mine in Peru, which will begin to grow in 2022, and Teck Resources Ltd. announced that its expansion of Quebrada Blanca in Chile will begin in 2021. Two major projects join First Quantum Metals Ltd. s Cobre Panama mine, which began production this year.
As a result, the CRU Group, which holds the main conference during Cesco Week, has reduced its deficit forecast and now expects the market to be in a small surplus this year and next. The researcher predicts a reduction of up to 270,000 tons by 2023.
