Goldman Sachs says rising EV usage to power higher copper demand

Goldman Sachs said rising usage of electric vehicles (EV) was a "key pillar of copper's bullish story", forecasting copper demand from the sector to amount to 1 million tonnes (mt) this year, rising to 1.5 mt in 2025.

"Due to copper’s highly conductive and ductile nature, it is an ideal candidate for transformation and transmission of electrical energy in EVs," the bank said in a note dated Wednesday.

Last year, EV production accounted for about two-thirds of the increase in global copper demand, with EVs likely accounting for about 27% of additional copper consumption over the next decade, the bank said.

Goldman said its analysts were optimistic about EVs, anticipating "strong sales in China, driven by lower prices and a high demand for EVs that has been building up over the rest of 2023."

Benchmark copper prices on the London Metal Exchange (LME) lost 7.5% in the second quarter of 2023 due to a slow recovery in demand in China and concerns over global economic growth.

However, copper usage in EVs could fall in the longer term, with the amount of copper used per EV likely falling to 65 kg per unit by 2030, compared with 73 kg in 2022, the bank said.