ICA anticipates steady copper demand growth

The International Copper Association (ICA), citing research by the London-based CRU Group, reports global demand for copper is to rise from 28.3 million metric tons (Mmt) in 2020 to 40.9 Mmt in 2040, growing at a 1.85 percent compound annual growth rate (CAGR).

The Washington-based ICA says copper’s market share in the next two decades will be defined by regional trends and the green energy transition.

Regarding the regional disparities, the CRU research forecasts the strongest growth in copper demand is expected in India, with a 7 percent CAGR, followed by the Association of Southeast Asian Nations (ASEAN) region with a 6 percent CAGR. “Both regions are currently observing high growth in the manufacturing and construction industries,” the ICA says.

India and ASEAN are expected to see the highest growth rates in wire rod demand, although China is expected to remain the largest wire rod user.

“This demand, which is forecast to be primarily driven by the development of energy infrastructure, is expected to ensure that wire rod remains the largest segment of total copper demand at an estimated 25 Mmt by 2040, constituting approximately 60 percent of total demand share over the long term,” says Juan Brihet, a senior consultant at CRU.

CRU anticipates copper wire and cable will see a slight decrease in global market share from 2020 to 2040 due to copper substitution. The research finds that winding wire will decline from 88 to 86 percent of market share, with power cable decreasing from 64 to 59 percent and automotive low-voltage electricity decreasing from 95 to 85 percent, even with a rise in electric vehicle (EV) sales.

“While the research finds wire and cable copper are expected to lose around 3 percent of the market by 2040, copper is predicted to retain an 80 percent market share in the long term, and substitution will be offset by gains in total copper usage, primarily driven by growth in end use applications and the green energy transition,” says Colin Bennett, director of global market intelligence at ICA.

Alternative energy applications are also predicted to influence copper tubing demand. ICA commissioned research from the London-based DMM Advisory Group indicates tubing will add nearly 1.6 Mmt to copper demand globally from 2020 to 2040.

ICA also says air source heat pumps should be a significant contributing factor, with the research anticipating sales of these pumps will quadruple by 2040, from 13 million units in 2020 to 52 million units in 2040.

“Heat pumps are an example of a growing energy transition market, and are an energy efficient, low-carbon, low-cost heating solution,” says Krisztina Kalman-Schueler, managing partner at DMM.

The forecast is likely good news for copper-bearing scrap sellers who may benefit from steady to surging demand for copper and brass scrap.

Last month, the Lisbon-based International Copper Study Group (ICSG) reported its 40-plus member nations produced more than 4.55 Mmt of recycled-content secondary copper in 2023. That figure represents a 9.58 percent jump in output of secondary copper compared with 2022, or about 400,000 metric tons in volume.

The 4.55 Mmt of secondary production comprised 16.9 percent of global output in 2023, up slightly from its 16.35 percent contribution in 2022.