Demand for Copper9 Feb 2022 17:34
Don't EUA have a lot of Copper in the ground?
Article from Money Morning
How to invest in the most useful metal in the world
I thought I’d cover copper today. It’s been a while and it’s kind of an important metal in the context of the global economy.
Dr Copper and all that.
Despite copper’s importance, precious metals tend to get more coverage. They are more glamorous after all.
But we do not concern ourselves with glamour or shizzle here on these pages. We get our hands dirty at the heart of industry.
Or something like that…
Copper is incredibly useful
Iron and aluminium are the most-used industrial metals in the world. Then comes copper. Its main use is in wiring, which accounts for about 60% of demand. Piping and roofing make up another 20%, machinery about 10%, and “other” the final 10%.
Overall copper demand is 65% electrical, 25% industrial and 10% transportation.
Its many uses all over the economy – homebuilding, construction, manufacturing, power generation, electronics and transportation – mean it has proven a barometer of economic health. Hence the nickname, “Dr Copper” – the metal with a PhD in economics.
The world’s largest copper producer is Chile (5.6 million tonnes last year). Then Peru (2.3m tonnes) and China (1.9 m tonnes), followed by the Democratic Republic of Congo and the US. Between them, those five countries account for about 60% of global production.
Supply was hit by Covid – many mines had to suspend operations – and there are also fears of falling investment, higher taxes and more resource nationalism in both Chile and Peru, where left-wing governments have been elected. So far, fear is worse than reality.
China, despite being the world’s third-largest producer, is a net importer and the world’s largest consumer.
It accounts for over half of world copper demand, followed by Europe, then the US and Russia.
Annual imports of copper concentrate to China hit a historic high last year, though, as Andy Home reports for Reuters, “refined copper imports fell by 25% relative to 2020 to 3.3 million tonnes, but the previous year had shattered the record books”. Last year's tally was up on 2019.
China’s internal production can’t meet its own internal demand, let alone what it needs for its exports’ manufacture.
Between 2005 and 2020 China spent more than $56bn to secure overseas copper assets.
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