The Global Outlook for Copper Mark Loveitt President ... Loveitt-youse.pdf · The Global Outlook...
Transcript of The Global Outlook for Copper Mark Loveitt President ... Loveitt-youse.pdf · The Global Outlook...
The Global Outlook for Copper
Mark Loveitt
President
International Wrought Copper Council (IWCC)
Legal Disclaimer
The purpose of this presentation is to guide programmes benefiting the
copper industry and to provide representatives of the copper industry with information to make independent
business decisions
Before the outlook for copper, a little bit of information about the IWCC…
Foundation & Membership
The IWCC:
• Founded in 1953
• Incorporated in the UK in 2013
• Is the representative trade association for the copper and copper alloy semis fabricating industry worldwide
Membership Geographic Coverage
More than 150 member companies Up to 80% of global output of semis
Country with IWCC Members
Aim of the IWCC
• To promote the interests of the fabricating industry by the encouragement of lawful co-operation within the fabricating industry and by the exchange of information
Back to business….
The outlook for copper
• Copper and copper alloy semis fabricators use either cathodes
• Copper and copper alloy semis fabricators use either cathodes or scrap
• Copper and copper alloy semis fabricators use either cathodes or scrap to manufacture semis, such as Wire Rod
• Copper and copper alloy semis fabricators use either cathodes or scrap to manufacture semis, such as Copper Tube
• Copper and copper alloy semis fabricators use either cathodes or scrap to manufacture semis, such as Brass Rod
• Copper and copper alloy semis fabricators use either cathodes or scrap to manufacture semis, such as Alloy rolled
• Copper and copper alloy semis fabricators use either cathodes or scrap to manufacture semis
Forecast Process
• Twice a year the IWCC prepares forecasts for copper supply and demand
• The spring 2014 forecasts concluded in mid-May (during the IWCC Joint Meeting)
• Forecasts prepared by the copper industry – both producers and fabricators – for use by the copper industry
• IWCC uniquely placed to provide input on demand
Supply Side Issues
• Global mine and refined production expected to increase in 2014 & 2015
• Scrap shortage Reduced feed for secondary refineries
Relatively low copper price Consequence of the economic downturn
– Reduced construction activity / demolition
• IWCC downward adjustment on refined production of 750kt in 2014 and a further 1,000kt in 2015
Source: IWCC
Demand Overview - 2014
Source: IWCC
4293
280
9700
911
3377
2378 651
Europe
Africa
China
Japan
Other Asia
NAFTA
South America
All Data: kt
Demand Overview
• Demand for refined copper improving Improved economic situation in most
regions Semis production should increase Reduced scrap – direct feed –
availability should further boost demand for cathode
All Data: kt 2012 2013 2014F 2015F
Demand 19,752 20,724 21,590 22,423
% change (0.1) 4.9 4.2 3.9
Source: IWCC
Europe
• Southern countries (Greece, Italy & Spain) continue to be in a poor state but may be some signs of upward progress
• Northern countries continuing to do well – for example the auto industry Improved European demand Might be weaker demand for autos from
China
• Downside risk Ukraine crisis
Source: IWCC
0
500
1,000
1,500
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Durable goods (billion, US$ of 2009)
0
500
1,000
1,500
2,000
2,500
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Non Residential (billion, US$ of 2009)
480
500
520
540
560
580
600
620
640
660
680
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Government Investment (billion, US$ of 2009)
0
100
200
300
400
500
600
700
800
900
1,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Residential (billion, US$ of 2009)
USA copper intensive sectors
Source: IWCC / Codelco - Chile
NAFTA Refined Copper Demand
0
500
1,000
1,500
2,000
2,500
2012 2013 2014F 2015F
Canada
Mexico
USA
USA Demand up 2.2% (2014) & 3.2% (2015) All Data: kt
Source: IWCC
Japan – GDP Trends
1.8
-3.7
-2.0
3.4
0.3 0.6
2.2
0.7 1.3
-5
-4
-3
-2
-1
0
1
2
3
4
2007 2008 2009 2010 2011 2012 2013 2014F 2015F
%
Japan – Wire and Cable Demand
Fiscal 2013
• 4% Increase By sector:
Increase: Construction, Automobile, Electricity & Machinery
Decrease: Electric Power & Communications
Fiscal 2014 • No increase forecast
By sector Increase: Construction Decrease: Automobile, Electric Power &
Communications
Source: The Japanese Electric Wire & Cable Maker’s Association
Japan – Wire and Cable (Shipments)
856
759
663 683 685 687 713 713
0
100
200
300
400
500
600
700
800
900
2007 2008 2009 2010 2011 2012 2013 2014
Source: The Japanese Electric Wire & Cable Maker’s Association Data for fiscal years
All Data: kt
Japan – Brass Mill Demand
Fiscal 2013 Demand • 5% increase By semis type:
Sheet & Plate – Increase Copper Tube – no change
Brass Rod – Increase Fiscal 2014 Demand • Small increase anticipated By semis type:
Sheet & Plate – Small Increase Copper Tube – Small Decrease Brass Rod – Increase
Source: Japan Copper and Brass Association
Japan – Brass Mill Production
998
807 754
864 806
759 795 801
0
200
400
600
800
1,000
1,200
2007 2008 2009 2010 2011 2012 2013 2014
Source: Japan Copper and Brass Association Data for the Fiscal year
All Data: kt
China Macro Economic Data
2013 Q1-14 2014 March
2014 target
GDP 7.7% 7.4% - 7.5%
Fixed asset investment
19.6% 17.6% 17.3% 17.5%
Industrial Production
9.7% 8.7% 8.8% 9.5%
Foreign trade 7.6% -3.7% -11.5% 7.5%
Import 7.3% -1.2% -13.8% -
Export 7.9% -6.1% -9.2% -
Retail sales 13.1% 12.0% 12.2% 14.5%
Source: IWCC / BGRIMM
China
• Upside Continual strong investment in the power
sector Power grid, Solar PV industry
Continual strong investment for 4G network construction, subsidy for IC and LED industry
Continual tight scrap supply Expected improved exports with the
depreciation of RMB
• Downside Risks Cooling down of housing industry Slow down of auto and home electrical
appliance production in H2-14 No restocking impetus from industry chain
with tight monetary supply
Source: IWCC / BGRIMM
Forecasts – Summary
All Data: kt 2012 2013 2014F 2015F
Mine Production (1) 16,635 17,940 18,586 19,912
% change 3.5 7.8 3.6 7.1
Refined Production (1) 20,049 20,729 21,613 22,538
% change 2.3 3.4 4.3 4.3
Demand 19,752 20,724 21,590 22,423
% change (0.1) 4.9 4.2 3.9
Statistical Surplus 297 5 23 115
1 – After downward adjustments for 2014 & 2015
Source: IWCC
Thank You!