Research commissioned by the International Copper Association (ICA) has found that copper's future market share will be determined by regional trends and the green energy transition.
The study, conducted by CRU Group, predicts that copper demand is likely to grow from 28.3 million tons in 2020 to about 41 million tons in 2040, a compound annual growth rate (CAGR) of 1.85 percent.
India is expected to be the fastest growing country for copper demand at a CAGR of 7%, followed by Southeast Asian countries at a CAGR of 6%.
These countries are currently experiencing high growth rates in manufacturing and construction.
In addition, India and Southeast Asian countries are expected to be the regions with the highest growth rate of copper wire (wire rod) demand. However, China is expected to remain the largest user of copper wire.
"Wire demand is expected to remain the largest part of total copper demand through 2040, driven by energy infrastructure development, estimated at 25 million tonnes, or about 60 percent of total copper demand in the long term," explained Juan Brihet, senior consultant at CRU Group.
He also expects green applications to affect copper pipe demand.
A separate study commissioned by the ICA and conducted by DMM Consulting Group projects that copper pipes will generate nearly 1.6 million tonnes of additional copper demand from 2020 to 2040.
Air source heat pumps should be a significant contributor, with the study projecting that sales of such pumps will quadruple by 2040, from 13 million in 2020 to 52 million in 2040. Krisztina Kalman-Schueler, managing partner at DMM, said heat pumps are an example of the growing energy transition market as an energy-efficient, low-carbon and low-cost heating solution.
CRU expects the global market share of copper wire and copper cable (cable) to decline slightly from 2020 to 2040 due to the replacement of copper.
The study found that by 2040, the market share of enameled wire will decline from 88 percent to 86 percent, the market share of power cables will decline from 64 percent to 59 percent, and the market share of automotive low-voltage electricity will decline from 95 percent to 85 percent.
Colin Bennett, ICA's global Head of market intelligence, said: "While the study finds that copper wires and cables are expected to lose about 3 percent of the market through 2040, copper is expected to maintain 80 percent of the market in the long term, with copper substitution offset by growth in overall copper usage, driven primarily by growth in end-use applications and the green energy transition."
To gain a deeper understanding of the ICA-commissioned study on copper's future market share and substitution, ICA will host a panel discussion on April 16 at the CRU 2024 World Copper Congress in Santiago, Chile.
Panellists will include Charlie Murrah, chief supply chain officer at Brihet, Kalman-Schueler and Southwire.
The panel will feature an informative session by key industry experts to discuss the work commissioned by ICA's Market Development Department, which is led by Brihet.
The panel will discuss the stability of copper substitution in 2022 and 2023, as well as the outlook for copper's share in the global market.
