Rio Tinto Foresees Challenges in Near Term Copper Outlook

SEATTLE (Scrap Monster): Rio Tinto Chief noted that near-term copper outlook faces pressures from supply-chain constraints and spiralling inflation. These factors are likely to impact the short term demand for the metal, said Jakob Stausholm, CEO of the world’s second largest miner.

In an interview to Boomberg, Stausholm said that the short-term outlook for copper looks a little bit challenged. There remains a lot of bottlenecks in the system in the post-Covid-19 era, amidst uncertainties in world economy. Also, inflation is at its highest level in almost four decades, he added.

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The prices of copper have registered notable decline so far this year, falling by almost one-fifth. The demand was hurt by Covid-related shutdowns in China, surging power prices in Europe and rising inflation in the U.S.

However, Stausholm shared the optimistic view that China still has the potential for growth amidst challenges, as it does not face the same inflationary pressures as Western countries. Also, copper’s long-term prospects look intact as the energy transition will lead to boosted production in order to meet the rising consumer demand.

Earlier, Goldman Sachs had predicted that copper is likely to begin outstripping supplies by 2025, thus doubling its price from current levels.