Refined copper production is likely to rise by 3.3pc in 2020 and 4pc in 2021, while refined zinc production could go up by 3pc in 2020 and 1.1pc in 2021. Primary aluminium production is expected rise by 3.6pc in 2020 and by 4pc in 2021.
Australia’s Department of Innovation and Science’s report for 2021 and 2021 highlights the production outlook for non-ferrous metals, fuelled by US-China trade war.
Aluminium
Australia’s annual output of aluminium and alumina is likely to remain unchanged for the next two years at 1.6mn mt and 20mn mt, respectively, with no planned expansions of smelter or refinery capacities.
Supply of aluminium exceeded its demand in 2019, which could drive aluminium prices lower in 2020 and 2021 to $1,700/mt and $1,615/mt, respectively. Australia’s key consumer markets were China (33mn mt), the US (4.6mn mt) and Germany (2.1mn mt).
After achieving its peak at $16bn in 2018-19, the total value of Australian exports of aluminium, alumina and bauxite is projected to fall to $14 billion in 2020-21, due to lower forecast prices.
World aluminium production decreased by 2.2pc in the second quarter of 2019 form the prior year period to around16mn mt, with a fall in China’s output. Production in China decreased by 3.6pc year from the prior period to around 9mn mt. Trade tensions have caused the US government imposing environmental regulations on China stagnating the latter’s production growth.
Global alumina usage fell by 3pc to 29mn mt in the quarter ending September from the 2018, driven by lower global aluminium production which was down by 2.2pc from the prior year.
| Primary Aluminium | Growth (%) | ||||||
| (kt) | 2 018 | 2019 | 2020 | 2021 | 2021 | 2020 | 2021 |
| Production | 64,408 | 64,664 | 66,971 | 69,670 | 0.4 | 3.6 | 4.0 |
| Consumption | 66,028 | 63,490 | 63,036 | 61,928 | -3.8 | -0.7 | -1.8 |
Copper
In 2019, copper prices fell to around $5,980/mt amid the falling economic growth. Rising consumption is projected to push the prices up to $6,190/mt in 2021. Consumption growth of 3pc and 4.1pc in 2020 and 2021, respectively, coupled with a supply deficit would support price rise.
Global prices are forecast to increase in 2020 and 2021, at an average rate of 1.8pc a year, to reach $5,890/mt in 2020 and $6,190/mt in 2021.Mine production is forecast to expand by an average 2.5pc a year over the period, to 22mn mt in 2021.
Output of refined copper is forecast to increase by an average rate of 3.1pc a year to exceed 25mn mt in 2021, primarily supported by new refinery capacity in China.
Australia’s copper exports are likely to grow with expansions and new projects in the pipeline. Export volumes are forecast to rise to 1mn mt in 2020-21 from 932,000mt, with the country’s export earnings exceeding to $10bn in 2020-21, from $9.7bn in 2018-19.
| Copper | Growth (%) | ||||||
| Production (Kt) | 2018 | 2019 | 2020 | 2021 | 2019 | 2020 | 2021 |
| – mine | 20,674 | 20,650 | 21,118 | 21,701 | -0.1 | 2.3 | 2.8 |
| – refined | 23,545 | 24,030 | 24,824 | 25,813 | 2.1 | 3.3 | 4.0 |
| Consumption | 23,645 | 23,706 | 24,417 | 25,422 | 0.3 | 3.0 | 4.1 |
Zinc
Zinc prices are likely to fall fuelled by production increase.Global production widely expected to increase by around 6pc in the beginning 2019.
Production growth of 7.3pc forecast for 2020 will increase zinc inventories in smelters, LME and Shanghai Futures Exchange (SHFE).
Developing Asian economies are forecast to increase their zinc consumption over the 2020 and 2021. World consumption would increase by 1.2 pc by 2021.
Australia’s zinc production has increased by 30pc in 2019 from the prior year. Australia’s zinc exports are projected to drop to $3.2bn in 2020-21 from $4bn in 2018-19.
| Zinc | Growth (%) | ||||||
| Production (kt) | 2018 | 2019 | 2020 | 2021 | 2019 | 2020 | 2021 |
| – mine | 12,685 | 12,880 | 13,816 | 13,966 | 1.5 | 7.3 | 1.1 |
| – refined | 13,177 | 13,403 | 13,872 | 14,020 | 1.7 | 3.5 | 1.1 |
| Consumption | 13,680 | 13,633 | 13,785 | 13,950 | -0.3 | 1.1 | 1.2 |