Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Demand growth for zinc, copper, and nickel will continue for the next two decades, according to a forecast report released by market researcher CRU Group. The research group, however, also states there could be threats to the growth of these metals.


Growth of these metals will be led by China given the government stimulus which is likely to drive demand even higher than estimates given before the pandemic. Demand in other countries will also recover from the losses in last year, despite COVID-19 posing a risk for the short-term, particularly in developing counties.


Demand for copper and nickel could rise on thrust towards electric vehicles, touted as a greener alternative for vehicles using fossil fuels. Consumption of global copper from renewables is likely to increase to 1.8mn mt in 2023 from 700,000mt per year in 2020. The growth will be driven by solar power facilities and electric vehicles and new electricity infrastructure.


Demand for zinc will also benefit from renewables in the coming years, notes the CRU report. A focus on offshore energy, one of the more zinc-intensive clean energy sectors, could spur growth, albeit the start will be from a small base. The solar power sector will become a major consumer of refined zinc, used in solar arrays installed on galvanized steel frames covering vast areas, notes the same report. Demand for zinc will also be supported by utility-scale batteries, currently a small market but has the potential of becoming a fast-growing sector.


The substitution of galvanized steel with aluminum auto sheets is a threat to zinc consumption as more electric vehicle manufacturers seek to reduce the weight of the EVs to increase battery efficiency. The switch will slowly reduce the auto sector’s need for zinc in the coming years.

For the copper market, aluminum remains a threat as prices for the former have increased dramatically. Primary aluminum demand has already increased to 65mn mt from just 15mn mt, while demand for refined copper increased to 23mn mt from 10mn mt, according to CRU report. 

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