Copper prices are expected to increase significantly in the coming years due to supply constraints and growing demand from various sectors, including renewable energy and electric vehicles.
The demand for copper remains robust, particularly from new energy vehicles, solar and wind energy projects, and China's grid investments. High-growth industries such as artificial intelligence data centers and defense are also contributing to copper consumption.
The supply side of the copper market is expected to tighten by late 2024 or early 2025 as many copper smelters are facing financial losses, which could lead to reduced production capacity. The outlook for copper is closely tied to global economic conditions and specific industry demands.
UBS projects that copper prices will average $10,500 per metric ton in 2025, with a projected deficit of over 200,000 tons in the copper market by that time. Despite potential short-term downward pressure, the demand for copper remains strong.
In addition to copper, UBS predicts that the alumina market will experience a glut by February 2025, leading to a significant drop in prices. The alumina market, like the broader commodities sector, is influenced by supply chain issues and geopolitical factors.
Stakeholders in the commodities market will need to remain adaptable to navigate these fluctuations. Overall, the outlook for both copper and alumina reflects a market in transition, driven by demand from emerging technologies and renewable energy initiatives, as well as supply constraints and economic fluctuations.