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"Global Mining Descisions in Your Palms"
By Benedikt Sobotka, CEO of Eurasian Resources Group and Co-Chair of the Global Battery Alliance.
Key takeaways:
- Demand for copper is expected to grow by 4% y-o-y in 2024; demand for cobalt by 15%.
- The copper market as a whole in 2023 shifted from a projected surplus to a deficit, driven by global supply challenges and rising demand.
- Entering 2024, strong market fundamentals, including green energy initiatives, positioning copper for further growth and higher prices
- Demand for copper in China rose by nearly 7% YoY in 2023, thanks to positive economic stimulus and easing of Covid-19 restrictions.
- Demand for cobalt, is expected to grow by 15% in 2024 on a y-o-y basis.
- Globally, batteries which contain cobalt, maintain market share, driven by a strategic shift in Western EV supply chains, aiming to decouple from Chinese counterparts.
- EV sales are continuing to increase at double-digit rates, with projections indicating that in 2024, 21% of total car sales will be EV. While there was less demand for cobalt in the portable electronics sector in 2023, we expect to see a far greater demand this year due to anticipated high levels of replacement products.
In 2023, prices were mixed for many key commodities, with some showing a clear negative trend while others like iron ore and copper bucked this trend. The reasons for this disparity were varied: a combination of local factors specific to each market as well as the slower than expected pace of China’s growth re-acceleration. An unexpected boon though has been the resilience of the US economy, particularly against the difficult backdrop of consistently high interest rates.
As we welcome 2024, there are pockets of positivity: market analysts consider that there will be a ‘soft landing’ for the US economy and healthy confidence overall in the global economy. Taking copper and cobalt specifically: the copper market is well-positioned for higher price levels, reflecting strong market fundamentals and increasing demand, driven largely by the necessary continued focus on green infrastructure and renewable energy. The cobalt market looks set to weather a dynamic and resilient trajectory, with clear strategic shifts in global EV dynamics and increasing demand across a range of sectors, setting the stage for growth for 2024.