There isn’t enough copper in the world — and the shortage could last till 2030

A copper deficit is set to inundate global markets throughout 2023 — and one analyst predicts the shortfall could potentially extend throughout the rest of the decade.

The world is currently facing a global copper shortage, fueled by increasingly challenging supply streams in South America and higher demand pressures.

Copper is a leading pulse check for economic health due to its incorporation in various uses such as electrical equipment and industrial machinery.

A copper squeeze could be an indicator that global inflationary pressures will worsen, and subsequently compel central banks to maintain their hawkish stance for longer.

“We’re already forecasting major deficits in copper to 2030,” said Wood Mackenzie’s Vice President of Metals and Mining, Robin Griffin. He attributed it largely to ongoing unrest in Peru and higher demand for copper in the energy transition industry.

“Anytime there’s political unrest it has a whole range of effects. And the obvious one … is the potential for mining sites to have to close,” he added. 

Peru has been rocked by protests since former President Pedro Castillo was ousted in December in an impeachment trial. The South American nation accounts for 10% of the global copper supply. 

Glencore announced Jan. 20 it was suspending operations in its Antapaccay copper mine located in Peru, after protesters looted and set fire to its premises.

Additionally, Chile — the world’s largest copper producer which accounts for 27% of global supply — recorded a year-on-year decline of 7% in November.

“Overall we believe Chile will likely produce less copper from 2023 to 2025,” Goldman Sachs wrote in a separate note dated Jan 16.

However, one market watcher cautioned against getting too caught up in the headlines.

“It’s typical to see disruptions and I don’t think we’re necessarily…