Copper’s short-term outlook faces pressures from supply-chain obstructions and decades-high inflation, impacting demand for the metal critical in everything from buildings to automobiles to mobile phones, according to the head of the world’s second-largest mining company.
“The short-term outlook might look a little bit challenged,” Rio Tinto Plc Chief Executive Officer Jakob Stausholm said in an interview at Bloomberg Headquarters in New York. “I don’t know where the world economy is heading, but I reckon coming out of Covid there’s still a lot of bottlenecks in the system and we’ve got inflation as high as we haven’t seen for 30 to 40 years.”
The comments come as copper prices are down more than 20% this year as Covid-related shutdowns in China, the world’s largest metal-consuming nation, surging power prices in Europe and ongoing inflation in the U.S. and elsewhere hurt demand.
Still, Stausholm said while China has its hurdles, it also has the potential for growth as it doesn’t face the same inflationary pressures as Western nations. He said he’s comfortable about copper’s long-term prospects, as the energy transition will demand production surges to meet consumers’ needs.Goldman Sachs predicts global demand for copper will begin to outstrip supplies by 2025, pushing prices to twice their current level.