Electric vehicles to drive long term Copper demand

A recent University of Michigan study highlights a looming copper shortage that threatens the global transition to electric vehicles. The study suggests hybrid vehicles as a feasible alternative to manage the copper demand and ensure a smooth transition to green energy. The University of Michigan study examined 120 years of global copper production data. There are over 709 copper mines globally. The largest, Escondida in Chile, produced 882,100 tonnes of copper in 2023. From 2018 to 2050, the world will need to mine 115% more copper than all the copper mined in human history up to 2018 just to meet current needs, excluding green energy demands. To meet the copper demands of electrifying the global vehicle fleet, six new large copper mines must be opened annually for several decades. The University of Michigan study highlights a significant challenge in the global transition to electric vehicles: the supply of copper. With the current pace of mining, it is unlikely that copper production can meet the demands of full electrification.

World Copper Mine Output Up Around 6% In First Quarter Of 2024

The International Copper Study Group (ICSG) has released preliminary data for March world copper supply and demand in its May 2024 Copper Bulletin. Preliminary data indicates that world copper mine production increased by about 6% in the first quarter of 2024, with concentrate production increasing by 4% and solvent extraction-electrowinning (SX-EW) growing by 14%. Global mine production in the first three months of 2024 has benefited from a recovery from 2023 constrained output (mainly in Chile, Indonesia, Peru and the USA) and also from additional output from mine projects ramping up to capacity namely in the D.R.Congo (DRC). Production in Chile increased by 3.2%, with concentrate output up by 5.5% and SX-EW down by 3.4%.

Preliminary data indicates that world refined copper production increased by about 5.3% in the first quarter of 2024 with primary production (electrolytic and electrowinning from ores) up by 4.7% and secondary production (from scrap) up by 7.8%. Preliminary data suggests that world apparent refined copper usage grew by about 4% in the first quarter of 2024. Growth in world refined usage was mainly supported by strong apparent demand in China, with usage in the rest of the world estimated to have increased by 0.7%.

Preliminary world refined copper balance indicates an apparent surplus of about 287,000 t in the first quarter 2024, according to ICSG.

Global aluminum foil market in good shape

According to Future Market Insights (FMI), the global aluminum foil market value is projected to grow from US$ 27,630.4 million in 2024 to US$ 44,787.7 million by 2034. Global sales are set to surge at 4.9% CAGR throughout the assessment period. Rising consumers' preference for hygienic and convenient packaging has led to a significant increase in the use of aluminum foil globally. Growing emphasis on sustainability and hygiene is set to fuel the Demand for aluminum foil market, highlighting consumer preferences for eco-friendly and efficient packaging options.

Emerging regions such as China and India are witnessing high demand for aluminum foil due to lifestyle shifts, food safety consciousness, and an aging middle class. The global trend towards sanitary and simple packaging solutions fuels the use of aluminum foil, as consumers prioritize freshness, safety, and simplicity in packaging decisions.

The food industry is experiencing rapid growth due to the growing demand for on-the-go food. Aluminum foil packaging is gaining traction due to its versatility, durability, and barrier properties. Factors contributing to this growth further include urbanization, changing work patterns, increased travel, and the preference for quick, hassle-free meals.

Aluminum foil packaging is used in various industries, including pharmaceuticals, personal care, and electronics, to ensure product integrity, stability, freshness, and reliability. They also reduce waste by eliminating the need for larger containers, minimizing excess consumption, and promoting environmental sustainability.

Global sales of aluminum foil are estimated to be valued at US$ 44,787.7 million in 2034. India is projected to grow at a CAGR of 7.4% by 2034.

Outlook:

India’s mining output growth slid to a 19-month low of 1.2% in March, easing sharply from February’s 8% rise. However, given the overall upbeat economic outlook, this could see a turnaround in coming months with the upcoming Union Budget offering further cues on the pace of infrastructure reforms and demand for commodities like metals and minerals. Global metal prices will closely track the US dollar index and mood in equity markets.