Copper Market to Shift from Surplus in 2024 to Balance in 2025: Nornickel
The global copper market is projected to see a surplus of 200,000 tonnes in 2024 before achieving balance in 2025, according to Nornickel's latest market analysis. The company attributes this trend to growing demand spurred by renewable energy, electric vehicles, and rising global electricity consumption.
While concerns about long-term copper supply shortages persist, recent investments in African mining operations, particularly from China, have supported production growth. However, a supply gap could emerge as refining capacity continues to outpace concentrate availability. Nornickel noted that 2 million tonnes of new smelting capacity, primarily in China, will come online in 2025, while only 600,000 tonnes of additional copper concentrates are expected, potentially creating a bottleneck for smelters.
Copper prices, which reached nearly $11,000 per tonne in May 2024, declined to approximately $9,000 per tonne by late November, reflecting these shifting dynamics. The review also highlighted vulnerabilities in refined copper demand, particularly in Europe, where industrial activity remains sluggish, and in the US, where economic uncertainty lingers.
Nornickel also provided insights into the nickel market, forecasting a surplus of 150,000 tonnes in both 2024 and 2025. This excess is primarily concentrated in the high-grade nickel segment, driven by rapid production growth in Indonesia and China. Despite moderate increases in demand for electric vehicle batteries and continued growth in stainless steel and special alloy applications, supply is outpacing demand. Rising inventories further reflect this trend, with exchange-traded stocks increasing by over 100,000 tonnes in 2024 due to inflows of cathode nickel from newly launched facilities in China. Total nickel stock accumulation, including OTC inventories, is expected to remain at 150,000 tonnes annually through 2025.
The palladium market, initially projected to face a deficit of 0.9 million ounces in 2024, is now expected to approach a balanced state. Nornickel revised its outlook, citing increased production in Russia and reduced demand from the automotive sector. Lower vehicle production and improved efficiency in the use of platinum group metals (PGMs) in catalytic converters, particularly in China, Japan, and the US, are anticipated to drive a 6% decline in palladium demand this year.
Meanwhile, the platinum market is forecast to remain balanced in 2024 but could face a minor deficit of 0.2 million ounces in 2025, as steady demand meets constrained supply.
