Copper Market: Mining, Production and Consumption of Copper
The goal is to achieve uniform contained copper statistics for mine production. Contained copper is defined as the analytical amount of copper outputted in concentrates and precipitates. Where applicable, statistical notation is made for solvent-extraction/electrowinning (SX-EW) at the mine level to distinguish this production from copper derived from concentrates and cement copper. While only one SX-EW category is shown at the mine level, SX-EW is separated statistically into two marketable types at the smelter and refinery levels. High-grade electrowon (Commercial Cathode) is SX-EW production that can be treated as refined cathode and sold as such. Low-grade electrowon is SX-EW production that must be re-refined.
Smelter production is divided into three groupings relating to the source of material used in producing blister, anode and other smelter-level products. The three categories are: Primary, from concentrates and precipitates; Low-grade electrowon from SXEW and RLE plants; and Secondary, from scrap materials . Electrowon copper resulting from roastleach-electrowon (RLE) processes is treated as from concentrates at the mine-level and, as from electrowinning at the smelter and refinery levels. Lowgrade electrowon from scrap is included in secondary smelter-production. To avoid double counting blister and anode, purchased and returned anode is excluded. Copper of Cu-Ni-matte is treated as smelter production at the source.
Refinery production is broken into three statistical source categories: Primary (electrolytic and firerefined); Secondary (electrolytic and fire-refined); and Electrowon (High-grade SX-EW ) refined production. Electrowon from copper-nickel matte is included in the primary category where this is necessary.
Usage of Copper
Recognising that metals are not consumed, but rather used, and therefore available for future reuse and recycling, the ICSG refers to refined copper production and refined copper usage in its reports. Copper usage represents refined copper used by semifabricators, i.e., at wire-rod mills, brass mills, foundries, chemical plants and other miscellaneous manufacturers. Usage data is either directly reported by the country, or the Secretariat estimates an apparent usage using the following formula: Refined copper production + refined imports - refined exports + refined beginning stocks - ending stocks.
Some countries, such as Canada, use shipments of refined copper where stocks at consumers and producers are inherently considered. Metal Exchanges warehouse stocks are treated according to the trade reporting scheme of a particular country. For many countries, some of the parts of this formula are missing, i.e., some countries do not produce refined copper or hold refined stocks. Trade data is available for most countries.
Stocks of Copper
Refined copper stocks are reported where held by the exchanges, the London Metal Exchange (LME), the Commodity Metal Exchange (COMEX), New York, Shanghai Metal Exchange (SHME) and by consumers, producers and governments. Merchant stocks are included where it is certain that these are nonduplicative to those already reported. Only refined products at plant sites are included. Items such as wire rod, tube and other semifabricated forms are not included.
Trade in all forms of crude, unwrought, wrought and semifabricated products and scrap are reported. In the case of semifabricates, only the major groupings are shown. Trade in copper and copper alloy ingot and master alloys are reported. Although there are more than 370 copper and copper alloys cast, the ingot type is not identified in the trade classes. Master alloys and hardeners are copper based alloys cast with high alloying element content and are used for producing copper alloys. Quantities reported are indicated on the tables.
Most data is in copper content, but where gross weight is reported, this is indicated on the table. In the case of copper ores and concentrates, most countries only report trade in gross weight. In this case, estimates of copper content of concentrates are made on information available.
World Copper Production and Consumption, 1960-1997
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. In times of market surplus, existing operations can be scaled back or closed down, while planned expansions can be delayed or canceled.
Copper Mine Production
World production: 1900: 495 kt, 1997: 11526 kt. Trend growth rates: Since 1900: 3.2%/year, 1960s: 3.4%/year, 1970s: 2.6%/year, 1980s: 2.2%/year and 1990s: 3.1%/year. Last 20 years: 2.1%/year, Last 5 years: 4,3%/year.
Changes in Copper Mine Production
Traditionally an important supplier of copper ores and concentrates, Chile has increased its share of world production from 13% in 1978 to 29% in 1997. Chile produced 3392 thousand tonnes in 1997. Africa, however, experienced a 52% reduction in its mine production between 1978 and 1997.
Copper Smelter Production
Smelting is the pyrometallurgical process used to produce copper metal. Recently, the trend to recover copper directly from ores through leaching processes has been on the increase (see section on Refined Copper Production). Primary smelters use mine concentrates as their main source of feed (although some use copper scrap as well). Secondary copper smelters use copper scrap (mainly low grade) as their feed.
Copper Smelter Production by Region, 1997 (thousand tonnes)
World Smelter Production: 11182 kt. Half of the world's smelter production comes from four countries: Chile 1390 kt, China 969 kt, Japan 1350 kt and U.S. 1721 kt.
Refined Copper ProductionWith the gradual emergence of solvent extraction-electrowinning (SX-EW) technology, refined copper produced from leaching ores now accounts for 13% of production. Recognizing the economic, as well as environmental importance of recycling, part of refined production is sourced from scrap.
Refinery Production 1997: 13564 thousand tonnes
In less than 30 years, South America, and in particular Chile, has emerged as one of the world's major suppliers of refined copper metal. From modest production levels of 177 kt in 1960, South American production has increased by 1425%. Similarly, Asia increased its production by 800% over the same period, most of which occurred in Japan and China.
Trends in Refining Capacity
World Refining Capacity was 16228 thousand tonnes in 1998. During the 1980's and the first half of the 1990's, world refining capacity averaged 12331 kt. Over the following four years total refining capacity increased by 26%, as compared to the previous 15 year average. Electrowinning capacity has increased by 286%, most of which are Copper Fabricators.
1997 Production of Copper and Copper Alloy Shapes (copper content, thousand tonnes)
World Copper Consumption
Since the beginning of the century, industrial demand for refined copper has increased from 494 thousand to over 13,000 thousand metric tonnes. Prior to the Second World War, demand grew at an annual rate of 3.1%. During the post war expansion years (1945 to 1973) demand grew by 4.5% per year. Since the first oil shock of 1974, demand has grown by 2.4% per year. During the 1990's, demand for copper has resumed at an above average rate of 2.9%.
Changes in Copper Consumption
From 1960 to 1997 world copper consumption leapt from 3735 kt to 13084 kt. The industrialization of developing economies in Asia, and the drive to improve standards of living in the region, fuelled the demand for copper over the last 10 years.
Copper Prices and Stocks
Real copper prices have been in an overall declining trend. As economies emerge from recessions and grow, pent up industrial demand, and/or tightness in supply, drives the price of copper upwards. Conversely, during economic slowdowns, excess copper supply and/or lower consumer demand, cause downward pressure on prices. Throughout these cycles, industry strives to improve its efficiency and cost structure (mainly through technological improvements).
Holdings in copper stocks can be expressed as weeks worth of refined consumption. Many analysts look at the build-up or draw-down of stocks as indicators of supply and demand. Stocks of copper are maintained by producers, consumers, merchants, exchanges, and in some instances, governments.
Source - International Copper Study Group