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About Copper
Copper plays an integral role in global industrialized development. Its unique chemical and physical properties including a high electrical conductivity, resistance to corrosion, and excellent malleability and ductility, make it a superior material for use in the building construction, electrical energy, telecommunications, transportation and industrial machinery businesses. Wire and cable products, used principally as energy cable, building wire and magnet wire, account for as much as 75% of copper consumption. Copper is also an important metal in non-electrical applications such as plumbing, roofing and, when alloyed with zinc to form brass, in many industrial and consumer applications. The building construction industry accounts for approximately 37% of worldwide copper usage.
Source:ICSG.
Copper Market
In the first 10 months of 2009, world copper usage is estimated to have decreased by 1% compared with that in the same period of 2008. Chinese apparent usage, which accounted for 40 % of world usage over this period, grew by 1.8 Mt (43%) and nearly offset an 18% decline in the rest of the world.* Usage in the EU-15 countries, Japan, and the United States, which combined accounted for about 29.5% of world usage, decreased by 21%, 31%, and 21%, respectively.
World mine production grew by 1.9% in the first 10 months of 2009 compared with the same period of 2008: Concentrate production grew by 0.5% while solvent extraction-electrowinning (SX-EW) was up by 7.3%. Production in the major world producers, of Australia, Chile, the United States, China and Canada fell by a total of 270,000 t, and partially offset growth in Indonesia, Peru, Democratic Republic of Congo and Brazil. In the first 10 months of 2009, world refined production remained practically unchanged (-0.1%) compared with that in the same period of 2008.
The average LME cash price for December 2009 was US$6,982 per tonne. The 2009 high copper price was US$7,346 per tonne (31/Dec), the low price was US$3,051 per tonne (23/Jan), and the average was US$5,164 per tonne. As of the end of December 2009, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 687,691 t, an increase of 298,008 t from stocks held at the end of December 2008.
The global economic crisis has created a large degree of uncertainty in the global market, and although a recovery in the world economy is expected in 2010, it is still unclear as to how it will impact both the supply and demand for refined copper. Preliminary projections are that mine production in 2010 will increase by 6.7% (1.1 million tons) to 16.9 Mt (7.5%) owing to new developments, ramp-up of production capacity, and a reduction in operational constraints.
World refined copper production for 2010 is projected to remain relatively stable, growing by 0.7% in 2010, to around 18.2 Mt. A shortage of concentrates in 2010 based on projected production (adjusted for unanticipated disruptions) is expected to restrain the growth of refined production.
A recovery in copper usage in most copper consuming countries is expected for 2010, but lower industrial demand and partial drawdown of unreported inventories accumulated in 2009 is expected to reverse the growth in apparent usage in China and lead to an overall global decrease in usage of around 0.7%.
In 2011 the market is expected to be more closely balanced as an increase in economic activity is expected to lead to stronger end use markets and the growth in refined production is expected to moderate.
Source:ICSG.
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