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COPPER

 

General Characteristics

Copper ranks third in world metal consumption after steel and aluminum. It is a  product whose fortunes directly reflect the state of the world's economy.

 

Copper is the best non-precious metal conductor of electricity. The metal's exceptional strength, ductility, and resistance to creeping and corrosion, makes it the preferred and safest conductor for building wiring. Copper is also used in power cables, either insulated or uninsulated, for high, medium and low voltage applications. Copper is an essential component of energy efficient motors and transformers and automobiles.

 

Supply and Demand

Global Scenario

 

Economic, technological and societal factors influence the supply and demand of copper. As society's need for copper increases, new mines and plants are introduced and existing ones expanded. 

 

Land-based resources are estimated at 1.6 billion tons of copper, and resources in deep-sea nodules are estimated at 0.7 billion tons.

The global production of refined copper is around 15 million tons.

 

The major copper-consuming nations are Western Europe (28.5%), the United States (19.1%), Japan (14%), and China (5.3%).

 

Copper and copper alloy scrap composes a significant share of the world's supply. 

 

The largest international sources for scrap are the United States and Europe. Chile, Indonesia, Canada and Australia are the major exporters and Japan, Spain, China, Germany and Philippines are the major importers.

 

Indian Scenario

 

The size of Indian Copper Industry is around 4 lakh tons, which as percentage of world copper market is 3 %. 

 

Birla Copper, Sterilite Industries are two major private producers and Hindustan Copper Ltd the public sector producers. 

 

India is emerging as net exporter of copper from the status of net importer on account of rise in production by three companies. 

 

Copper goes into various usage such as Building, Cabling for power and telecommunications, Automobiles etc. Two major states owned telecommunications service providers; BSNL and MTNL consume 10% of country's copper production. Growth in the building construction and automobile sector would keep demand of copper high.

 

World Copper Markets

LME and NYMEX are the two international markets, which provide direction to the copper prices. 

 

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.

 

Factors Influencing Copper Markets

Copper prices in India are fixed on the basis of the rates that rule on LME the preceding day. 

World copper mine production through exploration of new mine and expansion of existing mine. 

 

Economic growth of the major consuming countries such as China, Japan, Germany etc.

 

Growth and development in the Building, electronics and electrical industry.

 

 

 

Disclosures/Disclaimers:The Calls/materials contained/made herein are for information purpose and are not recommendation to any person to buy or sell any commodities/securities. The information is derived from sources, that are deemed to be reliable but its accuracy and completeness are not guaranteed. The author does not accept any liability for the use of this column. Readers of this column who buy or sell securities based on the information in this column are solely responsible for their action. We may or may not have any position in given stock. If any other entity, individual or service provider also giving the same script and recommendation than we are not responsible for that. By continuing to read or referring to material contained, you have read and agreed to the disclosure & disclaimers mentioned & published.