Global copper demand to surge by 2015, futures remain firm

LONDON (Scrap Monster): Global demand for copper will reach nearly 25 million tons by 2015, with growth being driven by end user markets in construction, building, electronic equipment, consumer goods and telecommunications, driven by China and India in the lead, according to a new study.

Chile is the largest producer of mined copper worldwide accounting for a global share of over 30% in 2009. China is the largest consumer of copper globally and demand for refined copper in China has been growing due to growth in various Chinese industries, such as telecommunications, energy, automotive, construction and consumer goods.

In particular, growing markets for copper include multimedia, digital graphics, high speed Internet, biomass, wind energy and geothermal energy are examples of growing industries where copper is highly utilized. The largest producer of copper is Chile accounting for more than 30% of global production.

In the meantime, world copper production will rise in the next two years with new copper production capacity coming on-stream in the US and Australia. This will result in a surplus which is likely to put pressure on prices in 2013.

Copper futures failed to make gains last week and fell 1% in US markets. In the weekend, weak U.S. employment data slammed the dollar and raised prospects for a sustained lower interest rate environment and another round of quantitative easing which led to recovery in the red metal.

Copper rebounded in London on speculation the 3.2 percent drop the past two days was overdone given declines in inventories that may signal rebounding demand in China.

Copper ended Friday up 2 percent, after surprisingly weak U.S. employment data slammed the dollar and raised prospects for a sustained lower interest rate environment and another round of quantitative easing.

London Metal Exchange (LME) three-month copper CMCU3 shed $179, or 2 percent, to close at $9,099 a tonne. In New York, the July COMEX copper contract HGN1 firmed 5.00 cents to settle at $4.1345 per lb.

In India at MCX, copper June contract fell from Rs.418 to Rs.408.70 per Kg lower by 0.22 %, after hitting a low of 401.80 per Kg whereas the August contract ended down by 1.91% to Rs.414. per Kg.