Investing in Copper

Copper is a metal used extensively in eletrical applications and architecture. It is alloyed with tin to make bronze, and with zinc to make brass.

Domestic Production and Use: Domestic mine production in 2009 declined by about 9% to 1.2 million tons and its value fell to about $6.2 billion. The principal mining States, in descending order of production—Arizona, Utah, New Mexico, Nevada, and Montana—accounted for more than 99% of domestic production; copper also was recovered at mines in Idaho and Missouri. Although copper was recovered at 29 mines operating in the United States, 20 mines accounted for about 99% of production. Three primary smelters, 4 electrolytic and 3 fire refineries, and 15 solvent extraction-electrowinning facilities operated during the year. Refined copper and direct-melt scrap were consumed at about 30 brass mills; 15 rod mills; and 500 foundries, chemical plants, and miscellaneous consumers. Copper and copper alloy products were used in building construction, 50%; electric and electronic products, 21%; transportation equipment, 11%; consumer and general products, 10%; and industrial machinery and equipment, 8%.1

Recycling: Old scrap, converted to refined metal and alloys, provided 160,000 tons of copper, equivalent to 10% of apparent consumption. Purchased new scrap, derived from fabricating operations, yielded 650,000 tons of contained copper; about 85% of the copper contained in new scrap was consumed at brass or wire-rod mills. Of the total copper recovered from scrap (including aluminum- and nickel-based scrap), brass mills recovered 70%; miscellaneous manufacturers, foundries, and chemical plants, 13%; ingot makers, 11%; and copper smelters and refiners, 6%. Copper in all old and new, refined or remelted scrap contributed about 35% of the U.S. copper supply.

Import Sources (2005-08): Unmanufactured: Chile, 40%; Canada, 34%; Peru, 13%; Mexico, 6%; and other, 7%. Refined copper accounted for 81% of unwrought copper imports.

Government Stockpile: The stockpiles of refined copper and brass were liquidated in 1993 and 1994, respectively. Details on inventories of beryllium-copper master alloys (4% beryllium) can be found in the section on beryllium.

Events, Trends, and Issues: With the onset of the economic crisis, the London Metal Exchange Ltd. (LME) price, which had averaged $3.65 per pound of copper during the first 9 months of 2008, fell sharply to an average of only $1.45 per pound in December 2008. Prices during the first 9 months of 2009, however, trended upward, the LME price averaging $2.82 per pound of copper in September, as supplies remained tight and there was renewed interest in commodity markets.

Global production of refined copper was essentially unchanged owing to limited growth in mine production that resulted from cutbacks in response to the global economic crisis and to operational constraints that reduced output in Australia, Chile, and Indonesia, and because lower scrap availability led to a decline in secondary refined copper. Refined copper consumption declined slightly, as double digit declines in the European Union, Japan, and the United States were mostly offset by growth in China’s apparent consumption of more than 25%. China’s year-on-year imports of refined copper rose by 1.1 million tons during the first 6 months of 2009, much of which was believed to have entered unreported government and industry inventories. The International Copper Study Group forecast a small refined copper production surplus to develop by yearend 2009 and a slightly larger surplus in 2010.

U.S. copper mine production, which had been expected to rise by more than 200,000 tons, declined by about 120,000 tons in 2009 following significant revisions to mine plans by several producers, including the closure of a mine opened during 2008. Domestic consumption of refined copper trended lower owing to weaker housing and automotive demand, and several brass mills closed during the year. U.S. mine and refinery production were expected to fall slightly in 2010, while consumption was projected to increase modestly in response to anticipated economic recovery.

World Resources: Recent assessments of copper resources indicated 550 million tons of copper remaining in identified and undiscovered resources in the United States8 and 1.3 billion tons of copper in discovered, mined, and undiscovered resources in the Andes Mountains of South America.9 A preliminary assessment indicates that global land-based resources exceed 3 billion tons. Deep-sea nodules were estimated to contain 700 million tons of copper. Substitutes: Aluminum substitutes for copper in power cables, electrical equipment, automobile radiators, and cooling and refrigeration tube; titanium and steel are used in heat exchangers; optical fiber substitutes for copper in telecommunications applications; and plastics substitute for copper in water pipe, drain pipe, and plumbing fixtures.

Copper Producers
BHP Billiton (NYSE: BHP) - The diversified Australian miner produces large amounts of copper.
Freeport McMoran (NYSE: FCX)
Huludao Zinc Industry Co. (SHE: 000751) - Copper cathodes
Hindustan Copper
HudBay Minerals (TSE: HBM)
Ivanhoe Mines (NYSE: IVN) - Oyu Tolgoi Project in Mongolia
Jiangxi Copper Company (OTC: JIXAY) - Copper rods, copper wires, and copper cathodes.
Norilsk Nickel (OTC: NILSY) - - Cathode copper and copper rod
Rio Tinto (NYSE: RTP) -
Southern Copper (NYSE: SCCO)
Taseko Mines (TSE: TKO)
Tongling Nonferrous Metals Group Co. (SHE: 000630) - Copper cathodes
Western Copper (TSE: WRN)

Copper price chart -

International Copper Study Group -
International Copper Association -

(wiki) - Copper on Wikipedia

Copper News
2011-07-26 - (reu) - Copper concentrate supply to China seen up on Oyu Tolgoi
2011-07-23 - (afp) - Strike extended at world's largest copper mine
2011-07-10 - (bl) - China June copper imports rise
2011-07-08 - (reu) - Chile copper mines brace for more bad weather
2011-07-08 - (sa) - Did copper just give the 'all clear' sign?
2011-07-04 - (bl) - Copper advances on speculation China is near end of tightening
2011-07-01 - (bl) - Copper stockpiles fall to two-month low on declines in Asia
2011-06-30 - (sa) - Can copper prices really be a market or GDP predictor?
2011-06-29 - (bl) - Brazil set to battle China over African copper with priciest bid: Real M&A
2011-06-28 - (ts) - Copper sector set to shine on growing demand
2011-06-27 - (mw) - Brazilian copper demand seen growing more than 10%
2011-06-25 - (nas) - Copper on the rebound on China's strength
2011-06-20 - (reu) - Japan May copper cable shipments up 3 pct yr/yr
2011-06-19 - (tad) - Law tries to end market for stolen copper
2011-06-16 - (bl) - Boleo copper project in Mexico to begin production in 2013
2011-06-13 - (fb) - Xstrata starts $1.6 billion Chile copper project study
2011-06-13 - (reu) - Kazakhmys secures $1.5 bln China copper loan
2011-05-18 - (reu) - Copper ends up sharply in broader commodity recovery
2010-11-01 - (bl) - China boss in Peru on $50 billion peak bought for $810 million
2010-10-26 - (bl) - Copper extends rally to 27-month high in New York on global supply concern
2010-10-26 - (bl) - Copper premiums in China slump by a third as two-year highs deter buyers
2010-03-01 - (ft) - Copper touches new high after Chilean quake
2010-02-01 - (reu) - China copper demand seen down by 1 mln T this year

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