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Donald Trump has described the Inflation Reduction Act (IRA) as a "green scam" and vowed to repeal it after he returns to the White House in January.
The global copper concentrate market will see a steep deficit during 2025-2027 as Asian smelters ramped up capacity amid a lack of matching mining projects in the pipeline, analysts said.
China is expected to add 2.6 million tonnes of smelting capacity in the next five years, said Craig Lang, an analyst at consultancy CRU.
Indonesia will add 725,00 tonnes of smelting capacity and India’s Adani smelter – first stage capacity at 500,000 tonnes and eventually hitting 1 million tonnes – is slated to start by the later half of 2024, Lang said.
CRU saw the global surplus in copper concentrate this year to be 240,000 tonnes and extend to 243,000 tonnes in 2024 before flipping into a steep deficit during 2025-2027, with the shortfall in 2026 hitting 595,000 tonnes.
Industry data provider SMM forecast a 216,000-tonne surplus in the global copper concentrate market this year to reduce to 107,000 tonnes in 2024, and switch to a deficit of 150,000 tonnes in 2025.
As smelting capacity in top copper consumer China surges, refined copper imports will fall to around 150,000 tonnes a month by the middle of this decade, from 300,00 tonnes now, Lang said.
China’s share of copper demand growth will fall, Lang said.
Downstream copper users’ operating rate in China this year has not been strong enough to support prices, said Yanchen Wang, managing director at SMM UK.
The State Grid Corporation of China’s focus on investing in ultra-high voltage projects will also see the company using more aluminum, Wang said.
SMM forecast the Chinese copper cathode demand to grow 2.4% this year to 14.1 million tonnes, and global copper consumption to expand 2.9% to 25.2 million tonnes.
Global copper cathode output is seen growing 3.5% in 2023 to 25.5 million tonnes, leaving a small market surplus of 300,000 tonnes, according to SMM.
(By Mai Nguyen and Siyi Liu; Editing by Lisa Shumaker)
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