More mining, less growth: RBC sees 'modest' copper surplus in near-term

Warrior Met Coal

02/06/2022 07:45

** New copper mining projects should help supply outstrip
demand in 2023-24, says RBC, as slower global growth and tighter
fiscal policies temper a growing need for electrification
    ** Prices should reach $4.32/lb this year before dropping to
$3.75 in 2023-24 when there should be a "modest surplus", says
the broker, before rising back to $4.00 for 2025 and 2026
    ** Politics are in focus in South America and in China which
consumes over half the world's copper, says RBC, noting however
that strikes, protests and COVID-linked interruptions remain in
a "normal" 5% range
    ** Chinese government stimulus should help prices but will
unlikely have the same impact as in 2020, it says, due to a
slower property market and less pull for exports
    ** Meanwhile Chile, which represents around 30% of global
production, continues to struggle with grade and other technical
issues limiting production start-ups this year, adds the broker
    ** Though building new mines is becoming more challenging,
RBC anticipates more supply from Chile's Quebrada Blanca, Peru's
Quellaveco and the Timok mine project in Serbia
    ** RBC says mining firms must give more time and costs to
ESG considerations, which include carbon emissions, water
scarcity, community and labour relations and rising taxes


 (Reporting by Sarah Morland)
 ((sarah.morland@tr.com
mailto:sarah.morland@thomsonreuters.com))