Demand for copper to exceed supply

2 March 2012

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3 March 2012 | Angeline Albert

Supply of copper will not be able to match demand this year, partly because of the appetite for the metal in emerging markets.

According to The Copper Market Review by research company Merchant Research & Consulting, China’s economic boom will result in the copper market witnessing a “vast deficit of the material worldwide, which has already demonstrated some traits at the end of 2011. The copper output at the global level is out of the scope to meet the expanding demand from emerging economies.”

Stephen Ashcroft, consultant at Brian Farrington advised: “Buyers should work closely with their technical colleagues to review copper substitutes and advise their sales colleagues to prepare key customers for the shortfall, suggesting that advance copper purchases could be made if the customer funds the cost of speculating and stockholding costs.”

At the time this article was published, copper was trading at $8,569.50 (£5,408) per tonne on the London Metal Exchange. Experts have previously predicted the price would be around $5,500 (£3,471) per tonne in 2012.

In January SM reported how high copper prices have prompted an increase in thefts of wire from train lines, resulting in significant costs to Network Rail and delays to rail freight operators.

And last month international mining group Anglo American’s financial report revealed that the company’s copper production was 4 per cent lower than in 2010 due to extreme wet weather and operational issues at the Collahuasi mine in Chile.

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