Electric cars expected to drive demand for copper
9 Apr 2019 - by
All signs point to a copper trade revival on the back of a burgeoning electric car manufacturer’s market that, by all indications, should experience significant growth in the immediate to longer term.
Since January, slower supply has helped to keep prices in check but the current deficit of available copper is expected to lead to a bull market as component part manufacturers bulk up with lower-price commodities before growing demand drives prices higher.
And as public and private concerns in the minerals industry gather for the World Copper Conference in Chile this week, analysts predict that the expected rally for high-conductive minerals is closer than expected.
This is despite leading US copper producer, Freeport-McMoRan, cutting production at its Indonesian Grasberg mines.
Global concerns over persistent tariff instability between the US and China, the additional pressure of uncertainty over Brexit, and industry concerns about the quality of ore coming out of several mines have also done little to dampen enthusiasm about copper and cobalt.
Moreover, delegates converging on the Chilean capital of Santiago also seem to know that besides Freeport’s Tenke Fungurume mine in the Democratic Republic of the Congo (DRC), several other mining companies like BHP and Nevada Copper have spent at least $1.1 billion in recent times to bolster exploration.
Even the relatively small country of Panama, with arguably much smaller deposits compared to the DRC, appears to be positioning itself for a spike in demand as momentum in the manufacture of electrical cars increases.
Interestingly, with ongoing hinterland hold-ups on the Copper Belt border between the DRC and Zambia, bridge construction delays at Kazungula affecting freight to Walvis Bay, truck burning on the north-south N3 corridor to Durban, and Dar es Salaam appearing incapable of solving port constraints, time will tell how SADC interests are going to answer the logistical call of a boom in copper exports.