Fitch Ratings: Global Copper Deficit Disappears as Project Pipeline Grows

(The following statement was released by the rating agency) Fitch Ratings-London-March 26: The increased copper supply pipeline of brownfield expansions and greenfield projects will eliminate any material market deficit in the medium term, Fitch Ratings and CRU say. China will remain a key driver for demand growth, while electric vehicles will become a significant factor in the long term. In the absence of additional investments, CRU expects a deficit to re-emerge in the long term. The medium-term copper supply outlook has increased and CRU expects an increase of more than 1 million tonnes in committed mine supply by the early 2020s from last year's expectations. Higher copper prices of about USD7,000 a tonne in the second half of 2017 and the first half 2018 led to advancement of existing mine projects and increased exploration of new ones. This resulted in a growing committed mine production and an increased project pipeline. Several high-profile brownfield expansions and greenfield projects that were given board approvals in 2018 are now due to come on stream in the next five years. These include the Quebrada Blanca Sulphides and Quellaveco projects, two on the world's largest copper projects. There is also an increased pipeline of probable and possible projects running up until the end of the next decade. Supply from these two categories could meet primary copper demand until 2034. However, not all these will be developed and the copper industry will still need to invest in projects that are at the pre-feasibility - prospect - or exploration stages, where spending levels have picked up but remain close to cycle lows. Therefore, without additional investments a deficit in the long term is still likely.