While the copper space has recently seen its fair share of concerns regarding a potential supply shortage, some analysts feel the issue is further off than has been suggested.

In a conversation with the Investing News Network, CRU Group Principal Analyst Robert Edwards shared his thoughts on a potential deficit hitting the copper market, saying that the questions that remain are “when” and “to what extent.”

“That’s a medium-term story that’s obviously been around for a number of years now. And I think it’s certainly true that, if you’re looking … at least five years ahead, there is, as we stand today, a shortage of copper coming,” he said.

“Certainly by the mid-2020s, and even slightly before, you’re starting to see some sizeable deficits in the market. I think what I caution against is the fact that, if we go back a year or 18 months, we were forecasting much steeper deficits emerging sooner.”

Investors have been wary of a supply shortage in recent months for various reasons, such as disadvantageous weather conditions in major copper-producing countries and production disruptions at major mines. One of these disruptions came in the form of blockades set up by protestors near MMG’s (ASX:MMG,HKEX:1208) Las Bambas mine in Peru, which went on for over a month and impacted shipments of the commodity to major markets like China.

However, Edwards elaborated in an optimistic tone that recent copper project financing and approvals have helped delay a possible shortage, highlighting examples such as Anglo American’s (LSE:AAL,OTCQX:AAUKF) Quellaveco copper project in Peru.

“There are lots of other, smaller projects that have got the go ahead, and so that’s closed the gap in supply that might have otherwise emerged in, say 2020 to 2021. So I think … there is an emerging deficit coming in the market, but it’s whether we ever really get to that stage, because obviously potentially more projects could get approved and that would then move that deficit further out.”

As a key component in electric vehicles (EVs), copper has been marked to see its demand grow as the EV movement continues to take shape. Despite the car market revolution being a hot topic across base and battery metals sectors right now, Edwards feels copper’s role in the mix is another long-term story.

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