A recent report highlights that the prices of nickel and copper could potentially double by 2035 as demand from electrification, construction and the global energy transition continues to outpace the ability of miners to add new supply.
The report, compiled by Coface, warns that nickel, copper and aluminum markets could face average supply shortfalls of roughly 10 percent of the expected demand by the mid-2030s. Its findings are based on data on consumption, production and pricing from the International Energy Agency, the World Bank, LME, and the U.S. Geological Survey.
The company argues that supply growth is likely to remain limited over the next decade, with annual production increases estimated at 0.4%, 1.5% and 1% for aluminum, nickel, and copper respectively.
Demand is projected to expand by roughly 1.8% a year if consumption continues at the pace observed over the last ten years. With a focus on net-zero goals, however, demand growth could go beyond 2% as well as 4.5% annually for copper and nickel, respectively.
The widening gap is being driven by growing metal requirements from renewable-energy infrastructure, electric vehicles, battery storage, power grids, and data centers. Tech related to clean energy alone could represent over 30% of global nickel and copper consumption by mid next decade.
Copper faces one of the most significant supply challenges. The financial services firm estimates the processed copper shortfall could increase to over 6 million tons, representing over 10% of expected demand. In net-zero emissions scenarios, the deficit could reach as much as 17%.
Nickel faces an even sharper potential imbalance, with the market potentially falling short by almost 35% of forecasted demand under a net-zero scenario, largely because of rising battery-manufacturing requirements. Aluminum could also see a deficit of around 10% of forecasted demand, although its constraints are expected to stem more from energy and industrial limitations than a lack of resources.
Marcos Carias, an economist at the firm, explained that U.S. tariffs are part of a broader transformation in global metals trade, with governments increasingly imposing restrictions on mineral imports and exports. The firm identified more than 1,100 such restrictions currently in force, which is over three times the figure recorded ten years earlier.
At the same time, developing new mines is becoming increasingly difficult. Permitting delays, uncertain exploration results, weak incentives for capacity expansion and project development timelines of 15 to 20 years are restricting the industry’s ability to respond quickly to higher demand.
The financial services firm expects persistent supply shortages and rising demand to keep industrial metal prices elevated for years to come.
Unlike temporary commodity cycles, the current pressure demonstrates structural supply limitations that increased prices may not resolve quickly, leaving manufacturers facing the prospect of elevated metal costs well into the next decade. When prices rise as projected, companies like Collective Mining Ltd. (NYSE American: CNL) (TSX: CNL) could be well positioned to see an increased flow of investor funds.
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