Copper

Introduction

Copper was the first mineral that man extracted from the earth. As the ages and technology progressed the uses for copper increased. Copper has been in use at least 10,000 years, but more than 95% of all copper ever mined and smelted has been extracted since 1900.Various estimates of existing copper reserves available for mining vary from 25 years to 60 years, depending on core assumptions such as the growth rate.

Copper is an excellent conductor of electricity, as such one of its main industrial usage is for the production of cable, wire and electrical products for both the electrical and building industries.

The construction industry also accounts for copper's second largest usage in such areas as pipes for plumbing, heating and ventilating as well as building wire and sheet metal facings.

Major Applications

Electrical/Electronics: 42%
Construction: 28%
Transportation: 12%
Consumer/General: 9%
Industrial Machinery:9%

Global Scenario

The eight leading refining nations, viz., United States, Japan, Chile, Canada, Zambia, Belgium, and the Federal Republic of Germany account for 67% of total refined metal production. Major exporters include Chile, Indonesia, Canada and Australia and major importers include Japan, China, the European Union and Philippines.

Majority of the consumption comes from industrialized/developed economies like the US, EU, Japan, China and Russia. Nowadays, consumption has increased in Asian economies owing to the outsourced manufacturing deals from developed nations.

Indian Scenario

India forms 3% of the total world demand for Copper, which exceeds the domestic supply, resulting in imports. However, with producers like Birla, Sterlite and Hindustan Copper scaling up their operations, India is emerging from its net-importer status to a fast growing exporter nation. PSU telecom companies BSNL and MTNL account for 10% of the total Indian consumption of copper.

Copper goes into various usages such as Building, Cabling for power and telecommunications, Automobiles etc. The domestic demand for copper in India is expected to continue to grow in double digit over the next 4-5 years. The rapid demand for copper in electrification & infrastructure programs will significantly boost its consumption in India. India is largely dependent in import of raw material to manufacture copper and involved in importing copper ores and extracts copper out of them.

Factors influencing Copper Prices

Copper prices are directly linked to the LME. On a broader scale, the following factors affect Copper prices worldwide.

Mining activity, new mine discovery and expansion of existing mines directly affects the supply side of the price equation and influences global pricing
Political problems in major supplying countries including Chile, South Africa and Peru cause prices to fluctuate. Supply problems can also occur as labour contracts in mines end, thus creating an artificial bottleneck in the short term
Weather problems like earthquakes also cause supply side issues, thus, influencing the prices
Demand fluctuations in developed nations coupled with issues with freight and shipping affect prices
Stockpiles or inventory positions at LME and COMEX have an impact on pricing as they alter the forward price curve
Since copper is increasingly used in the electrical and electronics industry, market scenario for these products also affects prices

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Copper