The initial forecast was based on an anticipated increase in production from Chile, China and Peru, but falling demand and ongoing disruption to mining activities due to lockdowns necessitated a revision to this forecast. However, GlobalData points out the ongoing disruptions will be offset by production from the Cobre Panama and Grasberg mines.

Total output for 2020 is now estimated at 21 million tonnes, slightly higher than the 20.6 million tonnes produced in 2019.

GlobalData senior mining analyst Vinneth Bajaj said production growth in China is forecast to be around 6%, down from the 9.6% forecasted before the virus outbreak, while production in Chile is forecast to grow by 0.3% and in Peru by 2% – compared with a 1.4% decline and 2.6% growth respectively in 2019. Lockdowns in China and Peru would reduce the output in two markets that currently account for around 40% of global supply.

There is also expected to be a slowdown in development of new projects, Bajaj added.

On the demand side, the construction sector, which accounts for 40-45% of the global demand, is likely to be heavily impacted by the covid-19 related restrictions and lockdowns.

Bajaj said that GlobalData’s latest expectations are for global construction output to grow by just 0.5% this year, down from its previous forecast of 3.1%.

“The direct impact on construction has been the halting of work – with labor unable to get to the construction sites – and disruption to supply chains with delays in the delivery of key materials and equipment, due to quarantines and travel restrictions,” Bajaj said.

Widespread postponement and cancellations of projects are also expected, he added.

Overall expectations are for copper demand to grow at 2.7% versus the 4.1% predicted before the outbreak. The lower growth rates are linked lower construction activity in China from mid-January 2020, although the situation is gradually improving with restrictions and lockdowns being eased, according to GlobaData.

However, GlobaData warned that there continues to be reduced activity globally as more countries moved to limit non-essential business operations.

“The current forecast assumes that the outbreak is contained across all major markets by the end of the second quarter – following which conditions would allow for a return to normalcy in terms of economic activity and freedom of movement in the second half of the year,” Bajaj said.

“There will be a lingering and potentially heavy impact on private investment due to the financial toll that is being inflicted upon businesses and investors across a range of sectors,” he added.