Rhythmic Reasoning_Full Report_Final_EN - Flipbook - Page 16
THE DRUMMER'S EAR | RHYTHMIC REASONING
Fig. 3: Global refined copper net
surplus (deficit) vs. LME copper price
400
$6
200
0
$4
-200
-400
-600
$2
-800
-1,000
-1,200
$2015
2018
2021
Copper Net Surplus/(Deficit) (kt) (LHS)
2024
2027E
2030E
Copper Price (USD/lb) (RHS)
We estimate that global consumption growth of only 1.0% is now
sufficient to keep the market in balance this year, with a slightly
higher average growth CAGR (compound annual growth rate) of
+1.7% per annum required over the 2025-2027 period to maintain
balance (vs. 2023-2024 growth of +2.7% and +3.4%, respectively;
long-term growth of +2.9% per annum). We forecast relatively
modest average 2025-2030 demand growth of +2.0% per annum
(including only +1.2% per annum in China). We forecast improving
2025-2029 Cu prices of $4.25/lb, $4.50/lb, $4.50/lb, $4.75/lb, and
$5.00/lb, respectively. Our long-term incentive price is $4.50/lb.
Given already low inventories and a tight structural market, we see
the potential for higher prices sooner than we currently envision,
particularly if trade war uncertainty dissipates and/or another
supply side shock emerges.
Source: Scotiabank GBM
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