Copper is ductile, corrosion resistant, malleable and an excellent conductor of heat and electricity. Alloyed with other metals, such as zinc (to form brass), aluminum or tin (to form bronzes), or nickel, for example, it can acquire new characteristics for use in highly specialized applications. As long as copper applications have flourished, it has proved to be completely recyclable. This increases the economic viability of this metal. Longevity of applications like roofing, wiring, and plumbing will ensure usage of copper over a long time to come.
United States, Japan, Chile, Canada, Zambia, and the European Union are the major refiners of copper; major exporters include Chile, Indonesia, Canada and Australia and major importers include Japan, China, the European Union and Philippines. Production via exploration of new mines is an important factor influencing prices. On this front, aspects like labour contract expirations also affect on copper prices. Further, shipping disruptions and natural calamities like earthquakes also impact prices. The copper most commonly used for sheet and strip applications complies with ASTM B370. It consists of 99.9 percent copper, and is available in six tempers designated by ASTM B370 as: 060 (soft), H00 (cold rolled), H01 (cold rolled, high yield), H02 (half hard), H03 (three quarter hard), and H04 (hard). Soft temper copper is extremely malleable and best suited for applications such as intricate ornamental work.
As a metal, copper has many unique and beneficial properties. Historically, it is one of the oldest materials in use by man and can illuminate parts of our great history throughout civilized times. The production and use of copper are also important parts of our economy. Copper use dates back to 10,000 years ago in western Asia. During the Chalcolithic Period, societies discovered how to extract and use copper to produce ornaments and implements. Some of the applications of copper include:
- Electrical Applications – wiring, instrumentation, microprocessors, etc.
- Architecture & Piping
- Household products
- Bio-medical applications
- Chemical applications
- Fire extinguishers
Across the globe, copper demand and supply are largely influenced by economic, technologic and societal factors. Total land based resources are estimated to touch 1.6 billion tons while deep-sea nodules are estimated to be 0.7 billion tons. The US, EU, Japan and China form the major consumers while Chile, Indonesia, Canada, Australia and EU form major suppliers. Chile is the highest producer of copper in the world, producing 34% of the world’s production. Peru & USA each produce 8% & 7% respectively of the world’s copper production. India forms 3% of the total world demand for Copper, owing to which it had to import Copper for its consumption. 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.
Indian Copper prices are directly linked to the LME fixings declared every day. 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