Copper prices are fluctuating amid a fear of global recession as inflation hits double digits across North America and Europe. Yet copper demand is set to grow as stimulus packages try to overcome the impact of China’s zero-Covid policy and revive infrastructure spend, and Europe attempts to accelerate its renewables – and associated cable/grid – deployment with Russian gas deliveries dwindling.

Copper demand is expected to outrun supply in the coming decade, according to GlobalData, Energy Monitor’s parent company.

Several reasons explain why copper production development is growing slowly around the world. David Kurtz, director for mining and construction at GlobalData, says key factors include deposits becoming increasingly expensive to develop and miners aiming more for quality rather than quantity. Moreover, even if there are substantial investments into new projects, it still takes years to develop a mine.

Despite the production bottlenecks, prices do not currently reflect the threatened state of supply, warned Richard Adkerson, the CEO of Freeport-McMoRan, an American company that is the biggest publicly traded producer of copper, in October. The supply outlook remains depressed as the current low prices are insufficient to drive investment in new production.

Falling copper supplies are already a reality. Of the top ten copper-producing companies globally, only three increased output in Q2 2022 compared with Q2 2021, according to GlobalData.

“Aside from a few major mines coming through in Chile and Peru, market growth is relatively limited,” says Kurtz. Production in Chile has declined this year, he adds, as output has been impacted by lower ore grades and labour issues. Chile remains the biggest copper producer globally, however the country’s production is forecast to decrease by 4.3% in 2022.