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.