AME forecasts a European copper price of US$8,000/t for the September quarter of 2022 and US$8,500/t for the December quarter.
We forecast the refined market to return
to a deficit of 481kt in the December quarter, following a surplus in the first
three quarters. We expect the world’s largest consumer, China, to implement
more stimulus measures to support its recovery from lockdown-related
disruptions. However, the country’s pursuit of zero-Covid continues to present
price downside.
AME’s 2022 full year European price
forecast is currently US$9,021/t. It is expected to increase to average
US9,600/t in 2023 on the back of growth in demand, particularly with upsides
from EV production, the deployment of renewable energy systems, and the
construction of digital and electricity infrastructure.
Ford’s new plan is to reach annual run
rate of 600k EVs by late 2023 and more than 2M by the end of 2026. The company
expects a compound annual growth rate for EVs to exceed 90% through 2026, more
than double forecasted global industry growth.
General Motors (GM) plans to
produce 1M EVs annually in North America by 2025. To meet their targets, Ford
and GM have recently signed contracts with supplies to secure the batter
capacities and raw materials for their EV productions.
AME maintains its forecast for benchmark
TC/RCs at US$80/t and ¢8.0/lb in 2023, up from US$65/t and ¢6.5/lb in 2022. The
increase in TC/RCs is due to the concentrate market returning to a surplus of
251kt in 2023 after a period of tight concentrate availability.
In the spot market, despite the recent
declines to below US$80/t and US¢8.0/lb, forecast spot TC/RCs will also
increase in the remainder of 2022. Several mines in Peru which were shut down
due to community protests have resumed operations. Other production disruptions
centred in South America and related to accidents, facility issues, covid
absenteeism and declining grades have been easing. Several major smelters in
China have restarted productions after planned maintenance, Covid lockdowns, or
company restructure.
Copper
producers are facing stricter ESG standards and harder permitting requirements.
Chile’s Environmental Assessment Commission of Valparaiso has rejected Anglo
American’s US$40m Phase V project, an operational continuity project for the
company’s El Soldado mine. The Phase V project is the sixth mining project that
has been rejected by the government and the second for Anglo American.
In May,
a Chilean environmental agency rejected the company’s US$3bn Los Bronces
Integrated Project, a mine life extension project to expand the currently
operational open pit and replace future lower grade ore by accessing higher
grade ore from a new underground section of the mine.
In the
global push for electrification and decarbonisation, governments and companies
have been acting to secure the supply of critical raw materials, including
copper. Barrick is near finalising definitive agreements with the Pakistan
government to restart the US$7bn Reko Diq project. Barrick will update the
project’s feasibility study with production expected in 2027/2028.

