DISASTER IN JAPAN : Incidence on copper

Resume of the Copper Letter - AURUBIS No. 83 - 15 March 2011

The recent events in Japan have left the world speechless. We need more time before we can fully comprehend the situation there, especially the tragic damage sustained by the nuclear power plants. Today, no-one can predict the effects that the earthquake, tsunami and nuclear crisis will have on Japan and its people. Its economy has been seriously affected in the north of the country. One of the biggest industries in Japan - the automobile industry - which is a large consumer of copper, has stopped production in the short term.

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Sofilec strengthens equity capital
to ensure growth
Bref Rhône-Alpes 27 janvier 2007
 
At the end of October 2006 Sofilec issued equity to financial partners to strengthen equity capital and ensure growth.
View Bref Rhônes-Alpes article

Copper still in deficit

L’USINE NOUVELLE from 5.10.11 

With consumption of copper on the decline, even the slight increase in mining production will not be enough to bring the market back into balance. 

According to the International Copper Study Group, the deficit - which was 350,000 tonnes in 2010, will be 200,000 tonnes in 2011 and 250,000 tonnes in 2012. The change in worldwide demand remains weak at 1.5% in 2010, but mining operations are declining. Following the fall in its mining at the beginning of the year, China - a key player in the sector - is seeing its consumption and its soliciting increase, allowing the world deficit to be contained. This trend should be confirmed in 2012 with a Chinese increase of 3.6%, and 2% for the rest of the world. 

The usage rate of mining facilities has moved from 1% to 79%, with new mining locations still insufficient to make up for recurring mining-related problems (quality of the ore, weather, strikes). 

In addition, following a steep rise at the beginning of 2011, secondary copper production should only increase by 5% in 2012. With the European industrial sector in a clear decline, it will produce less copper-containing waste, stepping up the need for the primary metal. 

Copper : over 6 000 euros !

L'Usine Nouvelle from 7.10.10

Taking advantage of the weak  US dollar, the monthly average price of  Girm for the ton of copper has reached 6 053,23 euros, therefore exceeding 6 000 euros for the first time since summer 2006. The rate of the ton of copper at LME has gone far beyong 8 000 dollars, and reached 8 150 dollars : such figures were hit in July 2008....

 Extract of article from Daniel Krajka

Copper is  falling

 L'Usine Nouvelle dated  02.10.08

Where will it end ?

Following a record level 3 months ago, the copper quotation dropped by 31%, to 6170$, with an accelerated devaluation of 15% in September.  Contrarily to the specialists forecast, the revival of the Chinese consumers needs was not confirmed ; notably the air conditioner market that dropped by 30.5% compared to 2007.

The Chinese need is disapointing, the copper imports remained stable over the last 12 months in spite of the official attempts to boost the economy. Nowadays the industrials try to limit the stock variations and all  purchases are for immediate needs ; more maintenance than replacement. 

In regards to cupriferous companies, they still having consequent losses that could on short term accelerate the stabilising of the market and with the return of need, engender  a new increase in price of copper. Contrarily to other basic metals, the quotations of copper don't go below the production costs. Even though differences persist, and besides the confirmation of the increase of the price of electricity, it is estimated at less than 2300 $/T, well below the actual market. In this depressive atmosphere, Barckays revised their forecast on the low : with an average price of 5500 $ for the 4th trimester 2008, continuing to drop early 2009 to finally increase to 8000 $ end of 2009. The German, Crane, is more moderate with its lowest level for the 2nd trimester at 6063 $ followed by an increase to reach an annual average of 6641 $ for the year 2009. 

Abstract of the article by  Daniel Krajka, L'usine nouvelle)

Copper on the up again
L'usine Nouvelle Apr. 17 2008

After a big drop in the fourth quarter of 2007, the quotation settlement of the ton of copper established a new record on April 11th with 8810 dollars. Simultaneously, the LME copper stocks dropped to 100.000 tons for the first time since July 2007.

Energy crisis in Chile

The ISCG informs that in 2007, the copper consumption exceeded the production of 42.000 tons. More than the refining, it is mostly due to insufficient mining production.
Several mining groups confirm the decrease in production is due to energy crisis. The 3 main minors in Chile, which ensures over 30 % of the offer, are forced to help their energy suppliers. 
Also the capacity of the new mines is always overestimated. 55 % of the projects are located in countries with risks.
“The demand is a storm but the offer is a nightmare” adds Owen Hegarty, director of Oxiana. In this context, the analysts of Goldman Sachs raised their forecasts of average price to the ton of copper and count 7791 dollars in 2008 and 9500 dollars next year.

(Abstract of article by Daniel Krajka, L'usine nouvelle)

Hedge fund Red Kit weight down by copper price
L'usine Nouvelle Dec. 14, 2007

After having tripled its value in 2006 (+188%), it's a 22% loss in november and a 50% loss since january.

Copper cash has lost more than 16% in just one month, coming to 6420 dollars per ton, not far from the january 6 201 dollars.

(Abstract of article by Daniel Krajka, L'usine nouvelle)

Copper's got the blues 
L'usine Nouvelle Nov. 08, 2007

The effects of the credit crisis have been more damaging than predicted.

Three-month red metal dropped to close to 7 500 dollars per ton for the first time in three months, while LME stocks, at nearly 170 000 tons, have returned to their April 2007 levels.

Demand is low in Europe and the United States, yet remains well sustained in China.
Markets are still overestimating supply increase. According to experts, predictions for the average price in 2008 are hovering between 7 200 and 9 000 dollars.


(Abstract of article by Daniel Krajka, L'usine nouvelle)

LME : Heyday continues for metal market
L'usine nouvelle oct. 9th 07

China is continuing to sustain demand and prices.
Most analysts expect that this rising trend will continue, or that prices will at least remain high for the end of 2007 and for 2008.
However, the opening of the LME week was accompanied by general lows, with three-month copper below 8 000 dollars, nickel below 30 000, zinc below 3 000 and aluminium below 2 400 dollars.

(Abstract of article by Daniel Krajka, L'usine nouvelle)

Copper is a hot topic
L'usine nouvelle Sept.21, 2007

Red metal approached 8000 $ in February 2007.
Refined metal stocks are still dropping, while new social movements are provoking market concern.
The 35.9% rise in Chinese consumption since June 2006 has more than compensated for the decrease in demand in Europe and the United States in June 2007.

(Abstract of article by Daniel Krajka, L'usine nouvelle)