New technologies are set to account for 35% of global copper and nickel demand by 2035, but supply and demand aren’t adding up.
A report from Coface shows Copper is facing a deficit of up to 17% and nickel shortages could reach 35% – yet demand has sharply risen. The lack of supply availability can be put down to the less than 1% of mineral exploration projects that become operational mines, which even then takes around 20 years to bring online.
Combined with this, supplies are largely imported from Asia. Within this, Indonesia accounts for 67% of global nickel ore production and China holds more than 50% of the world’s refining capacity for several metals.
This causes a geographical reliance – as we know from geopolitical tensions recently, this does not bode well for a stable industry.
Simon Lacoume, metals sector economist at Coface says: “Industrial metals are entering a new phase. The energy transition is creating significant new demand, whilst supply is becoming increasingly unresponsive. This combination could put sustained pressure on copper, nickel and aluminium and usher in a new bull market for metal prices,”
Renewable energy, electric vehicles, batteries, electricity grids and data centres are particularly metal-intensive – all contributors to a clean future, yet detrimental to mining demand. According to the IEA, clean technologies could account for 35% of global demand for copper and nickel by 2035.
Nickel appears to be the metal most affected by the energy transition, driven by batteries and electric mobility. In a Net Zero scenario, nickel could face a shortfall of around 6.5 million tons by 2035. Similarly, the aluminium shortfall could reach 5 to 15 million tons.
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