According to JP Morgan, copper mine growth is expected to slow significantly, with mine supply growth forecasted at 1.7% until the end of the decade, compared to 2.7% growth seen in the 2010s. This slowdown is projected to drive copper prices higher, with copper prices expected to reach around $9,500 per tonne.
Amy Gower, JP Morgan’s head of metals and mining commodity strategy, highlighted the pivotal role of China in driving copper demand over the past 15 years. While growth in China’s manufacturing sector has offset weaknesses in the property market, JP Morgan predicts China’s demand for copper will grow at a slower pace of 2-3% annually moving forward.
Additionally, with slower mine supply, the market will increasingly rely on scrap and secondary materials to meet demand, driving further volatility in the copper market. Copper concentrate treatment charges (TCs) have hit record lows due to a lack of mine supply and increased smelter capacity, with 2025 TC benchmarks expected to drop to $30 per tonne.
China and Indonesia Dominate Nickel Supply and Demand
In the nickel market, China and Indonesia continue to dominate both supply and demand, accounting for 75% of the global market, according to Macquarie analyst Jim Lennon. Indonesia now produces nearly 60% of the world’s nickel, with expectations of reaching 75% of global production within the next five years.
Nickel demand is shifting away from traditional markets like stainless steel, which accounts for two-thirds of nickel usage, toward the growing battery industry. Despite these shifts, Macquarie predicts nickel prices will likely remain stable over the next year as the market balances Class 1 and Class 2 nickel supplies.
Zinc Demand Expected to Recover in 2025
After a challenging year for zinc demand, which has been impacted by a weak construction sector in Europe and Asia, StoneX senior metals analyst Natalie Scott Gray forecasts a modest recovery in zinc demand in 2025.
Despite rate cuts and stimulus measures in China, a significant rebound in zinc demand isn’t expected until the second half of next year. On the supply side, mine production has fallen to three-year lows due to production cuts, lower prices, and rising energy costs. The market is expected to remain tight, with zinc concentrate treatment charges (TCs) at record lows, reflecting the strain on supply.
However, zinc prices are expected to recover in 2025, driven by increased demand in China, rising London Metal Exchange (LME) zinc prices, and increased mine production.
Lead Production and Demand to Grow Alongside Zinc and Copper Mining
The lead market continues to feel the effects of weaker mine production, muted demand, and falling prices. However, StoneX forecasts a positive shift in 2025, with both mine production and demand for lead expected to grow.
Lead mining is expected to increase due to rising production of copper, zinc, and silver, which will contribute to a 2.2% growth in demand compared to flat growth seen last year. The expansion of the battery sector will also support higher demand for lead, with macroeconomic tailwinds and lower interest rates likely improving market conditions.
Tin Prices Soar in 2024, Tracking Copper’s Energy Transition Upside
The tin market has emerged as a strong performer in 2024, with LME tin prices rising by 32.9% since the start of the year. Tom Langston, senior market intelligence analyst at the International Tin Association (ITA), attributes this surge to the energy transition and growing demand for tin in industries such as electric vehicles, solar, and semiconductors.
Despite supply challenges from key producers like Indonesia and Myanmar, which have seen delays and production drops, tin is expected to benefit from a continued supply deficit. The ITA forecasts a 10,000-tonne deficit in 2024, but predicts that supply challenges will ease in 2025 as production levels rise.
As both tin and copper play critical roles in the energy transition, the price correlation between the two metals is expected to continue in the coming years.
