Rio Tinto PLC, the world's second-largest mining company, said copper prices remained under downward pressure and the short-term outlook for copper demand was affected by supply chain barriers and high inflation.

Jakob Stausholm, CEO of Rio Tinto PLC, said in an interview with the media on Tuesday that although it has fallen 20% so far this year, copper still faces supply and demand challenges in the short term:

I don't know where the world economy will go. As the global economy emerges from the COVID-19 epidemic, there are still many supply chain bottlenecks in the whole economic system, and inflation has reached a high level not seen in 30 or 40 years.

But Stausholm remains optimistic about the long-term prospects for copper. It believes that the global energy transformation will catalyze the demand for copper. Unlike Western countries, which suffer from high inflation, China, the world's largest consumer of metals, also has the potential for demand growth.

Affected by the European energy crisis and high inflationary pressures, international copper prices have fallen 20% so far this year. Recently, the overall price has been hovering around 7700 US dollars per ton.

Fitch Solutions, a research firm, had previously cut its copper price forecast, slashing its forecast for copper prices next year to $8400 a tonne (previously $9580). The agency believes that there is a small oversupply in the copper market this year. But the copper supply gap will continue to widen from 2023. Driven by the energy transformation, the improvement in copper supply will not be able to keep up with the growing demand. The overall copper market is expected to have a long-term structural gap, with copper prices expected to return to $10000 / tonne in 2027 and $11500 / tonne by 2031.

Goldman Sachs Group, the standard-bearer of commodities, is also bullish on the long-term price prospect of copper.

Goldman Sachs Group said in a previous report that green demand and power grid construction will increasingly help copper demand recover. Regardless of recent fundamental trends, there is indeed a clear structural bull market in copper, which expects copper supply to peak in 2024 and record copper supply shortages starting in 2025. At that time, the international copper price is expected to exceed 14000 US dollars.