Coface sees copper and nickel prices doubling as metal shortages widen by 2035

Coface says copper and nickel prices could roughly double over the next decade as demand from electrification, construction and clean energy outpaces supply. The report warns North American manufacturers to expect higher input costs as trade restrictions, concentrated refining and slow mine development tighten markets through 2035.

Why it matters: - North American manufacturers could face a prolonged jump in input costs if copper and nickel tighten as Coface expects. - Coface projects average supply deficits of about 10% of demand for aluminum, copper and nickel by 2035. - The report says the pressure reflects structural shortages, not a short-lived price cycle.

What happened: - Coface released Back to the Future (Cycle), a report on industrial metals. - The report covers steel, aluminum, copper, zinc and nickel, which together make up about 95% of global metals demand by volume. - Coface says prices for copper and nickel could roughly double over the next decade. - The report links the outlook to demand from construction, electrification and clean energy. - The analysis compares projected supply through 2035 with two demand scenarios.

The details: - Supply growth is projected to lag demand over the next decade. - Aluminum supply is expected to grow 0.4% a year, copper 1.0% and nickel 1.5%. - Demand for all three metals is projected to rise about 1.8% a year, with faster growth under a net-zero scenario. - Clean energy technologies could account for about 35% of global copper and nickel demand by 2035. - Close to three-quarters of global copper demand already goes to electrification. - Data center buildout is adding to copper demand. - Coface projects a refined copper deficit of 1.5 million to 6.5 million tons by 2035, equal to about 11% of projected demand. - Under a net-zero scenario, copper's gap could widen to 17%. - Nickel shows the largest imbalance in the report. - Under a net-zero scenario, refined nickel could face a deficit of roughly 35% of projected demand. - Battery manufacturing is a major driver of nickel demand. - Aluminum faces a deficit of 5 million to 15 million tons, or about 10% of demand. - Coface says aluminum's constraint is low-cost electricity and smelting capacity, not raw material availability. - Steel and zinc are expected to stay more balanced because they have less exposure to energy-transition demand. - Price increases for steel and zinc are expected to be more moderate. - Trade barriers have more than tripled over the past decade. - By the end of 2025, 1,138 import and export restrictions on minerals were in force, up from 357 a decade earlier. - China controls around 70% of refining capacity for 19 of 20 key minerals. - China produces more than half of the world's steel, aluminum and refined copper. - Fewer than 1% of exploration projects become working mines. - Mine development timelines of 15 to 20 years limit how quickly new supply can reach the market. - Coface based the report on production, consumption and price data from the London Metal Exchange, the U.S. Geological Survey, the World Bank, the IEA and international metal study groups.

Between the lines: - The report suggests the next metals cycle may be shaped more by policy and infrastructure bottlenecks than by a simple economic rebound. - U.S. tariffs add to an already tight global market, which makes near-term relief less likely for manufacturers. - The concentration of refining capacity in China leaves global supply chains vulnerable to disruptions and trade rules. - The gap between mine discovery and commercial output means higher prices may persist even if companies respond quickly.

What's next: - Coface expects manufacturers in the U.S., Canada and Mexico to plan for higher metal costs over the long term. - The report says companies should not assume a trade deal will quickly bring prices back down. - The full report is available here