Copper
Copper has a wide range of attributes which is why it has so many applications today. It was found to be a very efficient conductor of electricity and heat as well as being flexible, strong, durable and resistant to corrosion. As such it has been key to many of man's technological advances, the two biggest being telegraphic communications and electricity.
Copper has a wide range of attributes which is why it has so many applications today. It was found to be a very efficient conductor of electricity and heat as well as being flexible, strong, durable and resistant to corrosion. As such it has been key to many of man's technological advances, the two biggest being telegraphic communications and electricity.
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Demand
Between 1900 and 2000, copper demand grew from 500,000 tonnes to around 13,000,000 tonnes, with growth accelerating since the 1950's. With some many widespread uses it is not surprising copper demand keeps growing and now with China, India and many other developing countries starting to industrialise and urbanise, demand is likely to grow from strength to strength. Per capita demand for copper rises as GDP per capita rises. Japan consumes around 12kg per capita, NorthAmerica consumers around 10kg per capita and Europe around 9kg per capita. The large populations of China, India, Eastern Europe and South America are all consuming less than 2kg per capita - this is a huge indicator of what lies ahead for copper demand.
Supply
Copper is not a particularly rare metal and it is produced in many countries, Chart 2 shows the geographical distribution of primary supply. Today copper supply is made up from two sources, the majority, 88%, comes from primary production, that new copper that is mined from the ground, but of growing importance is secondary supply which accounts for 12% of total refined copper supply. Secondary supply comes from recycling copper scrap.
Factors affecting copper prices
The wide production base means there are numberous factors that can affect production and therefore prices. In North and South America, production is often affected by labour unrest, in parts of Asia and Africa production can be affected by political unrest, take for example the closurse of the Bourgainville mine in Papua New Guinea and the decimation of production in Zambia. In addition, weather is an important factor affecting supply, with floods and droughts either hitting the production process or the transport of raw materials. New production also takes years to commission as the scale of mining is large, it takes enormous financing, requires endless environmental permissions and needs extensive infrastructure as well. All these factors make it hard for the market to balance supply and demand.
Lead
Many off lead's uses have been in decline for some time, it is no longer used for water pipes, its use in solder and paints is in rapid decline and environmental legislation is attempting to reduced its use in shot gun pellets, fishing weights and weights to balance car tyres. The lead/zinc battery for powering domestic electronics is also gradually being replaced by NiCd batteries. As lead is seen as an environmentally-unfriendly metal, its future is under constant attack.
Demand
Lead demand has been fairly steady over the past few years with demand rising to 7 million tonnes in 2004 from around 6.6million tonnes in 2001. However the rise in overall demand masks changes in regional demand. Battery manufacturing has been closing in the west and new production is being set up in asia and especially China. Western consumption has fallen from around 5.6 million tones in 2001 to around 5.3 million tonnes in 2004. The rise in lead prices since 2001, has been more to do with supply shortages than buoyant demand.
Supply
Lead supply comes from a combination of new primary lead production and from scrap recycling, with each contributing about 50% of supply. Lead supply can be affected by a host of factors, during the 2001 down turn in metal prices, zinc prices feel to levels that prompted producers to cut zinc mine output. As lead is produced as a co-product of zinc, the cutback in zinc output, also hit lead mine output. As the zinc markets fundamentals were worse than those of lead, lead production was held back, this ead to a tightness in lead supply, which resulted in lead prices rising from the low $400s/tonne in 2001 to over $980/tonne in 2004.
Nickel
Nickel is a metal with a bright future as it is the main alloying metal needed to produce certain types of stainless steel. The strength and life span of products built with stainless steel is vastly superior to similar products built with non-stainless steels.
Demand
Nickel, or more to the point stainless steel, is a relatively new metal and its use has grown significantly as Asia and China have built up their infrastructure. Much of the West's infrastructure was built before stainless steel was a popular building material. Growth in nickel demand is expected to come primarily from further growth in stainless steel. However the nickel market needs to be careful that it does not out price itself. In 2004, high nickel prices started to see some stainless steel producers switch from producing high nickel based stainless steels (austenitic stainless steels, or 300 series) to low nickel based stainless steels, (200 series).
Supply
Nickel occurs as oxides, sulphides and silicates, with nickel ores mined in about 20 countries and smelted or refined in about 25 countries. Primary nickel is produced and used in the form of ferro-nickel, nickel oxides and other chemicals, and as more or less pure nickel metal. Nickel is also readily recycled in many of its applications, and large tonnages of secondary or "scrap" nickel are used to supplement newly mined metal.
Courtesy: http://www.basemetals.com
Between 1900 and 2000, copper demand grew from 500,000 tonnes to around 13,000,000 tonnes, with growth accelerating since the 1950's. With some many widespread uses it is not surprising copper demand keeps growing and now with China, India and many other developing countries starting to industrialise and urbanise, demand is likely to grow from strength to strength. Per capita demand for copper rises as GDP per capita rises. Japan consumes around 12kg per capita, NorthAmerica consumers around 10kg per capita and Europe around 9kg per capita. The large populations of China, India, Eastern Europe and South America are all consuming less than 2kg per capita - this is a huge indicator of what lies ahead for copper demand.
Supply
Copper is not a particularly rare metal and it is produced in many countries, Chart 2 shows the geographical distribution of primary supply. Today copper supply is made up from two sources, the majority, 88%, comes from primary production, that new copper that is mined from the ground, but of growing importance is secondary supply which accounts for 12% of total refined copper supply. Secondary supply comes from recycling copper scrap.
Factors affecting copper prices
The wide production base means there are numberous factors that can affect production and therefore prices. In North and South America, production is often affected by labour unrest, in parts of Asia and Africa production can be affected by political unrest, take for example the closurse of the Bourgainville mine in Papua New Guinea and the decimation of production in Zambia. In addition, weather is an important factor affecting supply, with floods and droughts either hitting the production process or the transport of raw materials. New production also takes years to commission as the scale of mining is large, it takes enormous financing, requires endless environmental permissions and needs extensive infrastructure as well. All these factors make it hard for the market to balance supply and demand.
Lead
Many off lead's uses have been in decline for some time, it is no longer used for water pipes, its use in solder and paints is in rapid decline and environmental legislation is attempting to reduced its use in shot gun pellets, fishing weights and weights to balance car tyres. The lead/zinc battery for powering domestic electronics is also gradually being replaced by NiCd batteries. As lead is seen as an environmentally-unfriendly metal, its future is under constant attack.
Demand
Lead demand has been fairly steady over the past few years with demand rising to 7 million tonnes in 2004 from around 6.6million tonnes in 2001. However the rise in overall demand masks changes in regional demand. Battery manufacturing has been closing in the west and new production is being set up in asia and especially China. Western consumption has fallen from around 5.6 million tones in 2001 to around 5.3 million tonnes in 2004. The rise in lead prices since 2001, has been more to do with supply shortages than buoyant demand.
Supply
Lead supply comes from a combination of new primary lead production and from scrap recycling, with each contributing about 50% of supply. Lead supply can be affected by a host of factors, during the 2001 down turn in metal prices, zinc prices feel to levels that prompted producers to cut zinc mine output. As lead is produced as a co-product of zinc, the cutback in zinc output, also hit lead mine output. As the zinc markets fundamentals were worse than those of lead, lead production was held back, this ead to a tightness in lead supply, which resulted in lead prices rising from the low $400s/tonne in 2001 to over $980/tonne in 2004.
Nickel
Nickel is a metal with a bright future as it is the main alloying metal needed to produce certain types of stainless steel. The strength and life span of products built with stainless steel is vastly superior to similar products built with non-stainless steels.
Demand
Nickel, or more to the point stainless steel, is a relatively new metal and its use has grown significantly as Asia and China have built up their infrastructure. Much of the West's infrastructure was built before stainless steel was a popular building material. Growth in nickel demand is expected to come primarily from further growth in stainless steel. However the nickel market needs to be careful that it does not out price itself. In 2004, high nickel prices started to see some stainless steel producers switch from producing high nickel based stainless steels (austenitic stainless steels, or 300 series) to low nickel based stainless steels, (200 series).
Supply
Nickel occurs as oxides, sulphides and silicates, with nickel ores mined in about 20 countries and smelted or refined in about 25 countries. Primary nickel is produced and used in the form of ferro-nickel, nickel oxides and other chemicals, and as more or less pure nickel metal. Nickel is also readily recycled in many of its applications, and large tonnages of secondary or "scrap" nickel are used to supplement newly mined metal.
Courtesy: http://www.basemetals.com
