UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT
MULTI-YEAR EXPERT MEETING ON COMMODITIES
AND DEVELOPMENT
9-10 April 2014
Developments and New Challenges for Base Metals:
The Case of Copper, Zinc, Lead and Nickel
by
Mr. Carlos Risopatron
Director of Economics and Environment
International Copper Study Group (*), Lisbon Portugal
*presentation prepared with the assistance of the
International Lead and Zinc Study Group and
the International Nickel Study Group
The views expressed are those of the author and do not necessarily reflect the views of
UNCTAD.
UNCTAD 2014 Multi-year Expert Meeting on Commodities and Development
Geneva 9-10 April 2014
Developments and New Challenges for Base Metals:
The Case of Copper, Zinc, Lead and Nickel
Carlos Risopatron, Director of Economics and Environment
International Copper Study Group (*), Lisbon Portugal
(*) presentation prepared with the assistance of the
International Lead and Zinc Study Group and the International Nickel Study Group.
1
Summary
1. Description of the Study Groups: Membership and Objectives
2. Global Use, Mining and Recycling of Refined Copper
3. Global Use, Mining and Recycling of Refined Lead and Zinc
4. World Mining, Scrap Use and Demand for Nickel
5. Regulatory Trends and Non Ferrous Metals Based Development
6. Role of China in the Use of Copper, Lead, Zinc and Nickel
7. World Metal Balances and Inventories 2013-2014
8. Metals Study Groups Activities 2014 and Publications
2
ICSG Membership



Autonomous International Governmental Organization. Active industry involvement.
Main source of unbiased information for governments, the public and the industry.
Membership open to countries involved in copper production, use or international trade.

23 member countries and the EU. 4 recent member states. Non-members can attend as observers.
Australia
France
Luxembourg
Serbia
Belgium
Germany
Mexico
Spain
Chile
Greece
Peru
United States
China
India
Poland
Zambia
European
Community
Italy
Portugal
Iran
Russian Federation
Finland
Japan
Sweden
3
International Lead and Zinc Study Group


Autonomous International Governmental Organization.
Membership open to any country involved in lead and/or zinc production, usage, or trade.

30 members (>85% of global lead/zinc industry). Key role in the industry.
Australia
Germany
Morocco
Serbia
Belgium
India
Namibia
South Africa
Brazil
Iran
Netherlands
Sweden
Bulgaria
Ireland
Norway
Thailand
Canada
Italy
Peru
United States
China
Japan
Poland
European Union
Finland
Korea Rep.
Mexico
Portugal
France
Russian Fed.
4 4
International Nickel Study Group
Autonomous International Governmental Organization.
Co-located with ICSG and ILZSG resulting in significant cost savings
Enhancement of market transparency in the nickel market.
Active industry involvement. Forum for discussions on nickel. 15 members.
Australia
Brazil
Cuba
European Union
Finland
France
Germany
Greece
Italy
Japan
Norway
Portugal
Russian
Federation
Sweden
United
Kingdom
5
World industrial uses of refined and scrap copper, nickel, zinc and lead.
Industrial Uses of Copper
Brass Mill
Alloys
17%
LV, Auto, Bare
Wires 18%
Foundry
Castings and
Powders 5%
Power Cable,
Building and
Magnet Wire
40%
Industrial Uses of Nickel
Batteries &
Other
7%
Foundry
5%
Non ferrous
alloys
8%
Alloy steel
8%
Copper Tube,
Rod, Plates
Foil 20%
Industrial Uses of Zinc
Stainless Steel
63%
Plating
9%
Industrial Uses of Lead
16%
Batteries
17%
52%
Cable Sheathing
Rolled & Extruded
Shot/Ammunition
77%
Lead batteries:
weight vs low cost
recycling.
Cars Inc. likes them.
6%
Galvanizing
Alloys
Brass and Bronze
Semis
Chemicals
Miscellaneous
3%
6%
1%
Alloys
6%
Pigments & Compounds
2%
Miscellaneous
3%
8%
3%6
2012 Global Copper Flows 25 Mt = 16.5 Mt Mine Refined+ 3.6 Mt Scrap Refined + 4.9 Mt Direct Scrap.
Ore &
Concentrate Trade
Anode &
Blister
Trade
Refined
Copper
Trade
Alloy
Ingot
Trade
Fabrication
Production
Solventextraction
Wire Rod
Plant &
Wire Mill
Electrowinning
Refined
Copper
Mine
Smelter
Refinery
New Scrap
Brass Mill
Copper
Semis
End-of-Life
Product
Trade
Manufacture
Construction
Product Use
(Lifetime)
Infrastructure
Copper
Stock in
Use
Industrial
Equipment
Transport
Chemical/
Powder Plant/
Electroplating
Household
Appliances
Other
Uses
Foundry
Finished
Products
Abandoned
& Hoarded/
Stored
End-of-Life
Products
End-of-Life
Management
C&D
End-ofLife
Products
INEW
IEW
ELV
WEEE
MSW
New
Scrap
Slag &
Residues
Mineral
Processing
Finished
Product
Trade
Semis
Trade
Ingot
Maker
Hydrometallurgical Plant
Dissipative/
Dispersive
Uses
Copper Scrap
& Residues
Low
Quality
Scrap
High
Quality
Scrap
Alloy
Scrap
Direct Melt
(Alloyed/
Unalloyed)
New
Scrap
Old
Scrap
Scrap Recycling
C&D: Construction & Demolition Waste, INEW: Industrial Non-Electrical Waste,
IEW: Industrial Electrical Waste, ELV: End-of-Life Vehicles, WEEE: Waste
Electric & Electronic Equipment, MSW: Municipal Solid Waste
Disposal
Other
Metal
Recycling
Loops
Scrap
Trade
7
Industrial use of copper trend 2007-2012: up just in China and a few oil economies.
Fabrication of Copper and Copper Alloyed Products: 2012 Versus 2007
million tonnes gross weight, other alloyed metals included
2007
2012 Oct*
Growth
Country
Mt
6.3
2.94
1.85
1.75
1.33
1.75
0.85
0.34
0.34
0.54
China
United States
Germany
Japan
Korean Republic
Italy
Taiwan (China)
Spain
Poland
France
Slovakia
India
Russian Federation
Turkey
Thailand
Brazil
Indonesia
United Arab Emirates
Saudi Arabia
Iran
Sample of Countries
Mt
0.71
0.80
0.41
0.29
0.37
0.20
0.00
0.19
0.19
11.31
2.17
1.52
1.33
1.06
1.03
0.71
0.32
0.23
0.19
0.02
0.64
0.56
0.27
0.27
0.23
0.22
0.21
0.21
0.20
21.1
22.7
%
79.5%
-26.0%
-17.7%
-23.9%
-20.2%
-41.2%
-16.4%
-4.7%
-31.4%
-64.5%
-9.6%
-30.2%
-34.0%
-5.6%
-38.4%
8.5%
100%
8.4%
7.5%
Source
ICSG
ICSG
ICSG
ICSG
ICSG
ICSG
ICSG
ICSG
ICSG
ICSG
ICSG
Estimate
Estimate
Estimate
Estimate
Estimate
Estimate
Estimate
Estimate
Estimate
7.4%
* 12 months before November 2012
In 2012 the industrial use of copper fell 2% worldwide: falling end uses, mainly in Europe.
Global Use of Copper in Fabricated Products
annual growth 2012/2011
2012 growth
Industrial Transformers
6.6%
Power Transmission
6.6%
Harnesses, Motors
2.7%
Railroad, Shipping
2.7%
Telecommunication
-0.7%
Building Architecture
-1.7%
Consumer products, tools
-2.8%
Defense, Coinage
-3.1%
Building Plumbing
-3.5%
Building Power
-3.5%
Buildings Phone Wire
-4.2%
Industry-No Electric
-5.1%
Cooling Equipment
-7.8%
Air Con Tube
-8.8%
Electronics
-9.9%
Vehicle Radiators Tubes
-15.5%
Global Use of Copper in 2012
Source: ICA/IWCC/ICSG
-1.9%
Copper and Alloys Gross Semifabrication in Europe
ICSG Reported Annual % Growth
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
-15.0%
-20.0%
-25.0%
-30.0%
17.2%
0.3%
2007
-4.9%
2008
2009
-8.3%
-23.3%
2010
2011
-5.4%
2012
-5.9%
2013 F
8
In 2012-2013 more mine production caused copper oversupply and reduced prices.
But ~840 Kt of these concentrates to stock. China reported +630 Kt of concentrate imported in 2013.
Copper Mine Production: Recent Additions
Chile
China
DRC
USA
Peru
Zambia
Mongolia
Australia
Mexico
Indonesia
Canada
Brazil
ROW
2012
171
195
104
55
63
31
4
47
56
144
10
7
124
World
621
Growth
Kt-Cu
2013
2014
342
71
282
63
78
53
75
61
11
110
52
50
121
2 Years
513
266
386
118
141
84
71
14
45
34
62
57
245
1,347
117%
1,968
Source: ICSG
China: Copper Concentrate Available 2010-2013 Kt-Cu
2016 Global Copper Mine Capacity
Forecast, thousand tonnes copper Kt.
China: Copper in Concentrate Output
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
28.000
China: Copper in Concentrate Net Imports
27.500
27.000
26.500
26.000
25.500
2010
2011
2012
2013
2013 (January)
2014 (January)
9
It might be not enough stock: 2015-2017 new copper mine capacity plans down 1.5 Mt-Cu on 2013 CAPEX cuts!
Observed industrial copper use up ~7.6% in 2013, up just ~2% out of China, partly led by lower prices.
So in 2013 the industrial use of refined copper and copper scrap was not far than 27 Mt-Cu worldwide.
Copper and Copper Alloy Products Semifabrication
Kt-Cu Copper Content, Surveys and Estimates
2012
2013
China
United States
Germany
Japan
Korean Rep.
Italy
Taiwan (China)
Turkey
United Arab Emirates
Spain
India Wire Rod
Poland
Saudi Arabia
France
Egypt
Iran
Oman
Kuwait
Morocco
9,408
1,748
1,209
1,073
938
834
494
457
285
258
330
263
204
166
145
95
14
9
1
10,600
1,755
1,235
1,084
975
845
493
485
375
250
306
251
205
155
155
100
14
9
-
Reported Ex-China
All Reporting
8,521
17,929
8,692
19,292
Vol Change % Change
Kt
1,192.0 12.7% Jan-Dec
7
0.4% Forecast
26
2.2% Jan-Dec
11
1.1% Forecast
37
3.9% Forecast
11
1.3% Jan-Dec
(1) -0.2% Jan-Dec
28
6.2% Jan-Dec
90 31.4% Jan-Dec
(8) -3.0% Forecast
(25) -7.5% Forecast
(11) -4.3% Jan-Dec
1
0.5% Jan-Dec
(10) -6.2% Jan-Dec
10
6.9% Jan-Dec
6
5.9% Jan-Dec
0
0.0% Jan-Dec
0
0.0% Jan-Dec
(1)
Jan-Dec
170.8
1,362.8
2.0%
7.6%
2013 Annual Growth %
United Arab Emirates
China
Egypt
Turkey
Iran
Korean Rep.
Germany
Italy
Japan
Saudi Arabia
United States
Oman
Kuwait
Taiwan (China)
Spain
Poland
France
India Wire Rod
31.4%
12.7%
6.9%
6.2%
5.9%
3.9%
2.2%
1.3%
1.1%
0.5%
0.4%
0.0%
0.0%
-0.2%
-3.0%
-4.3%
-6.2%
-7.5%
10
Recycled copper use <8.5 Mt-Cu in 2013. The global copper scrap shortage deepening in 2014. Why?
If the economic value of the metal is high enough, no much recycling regulation/enforcement needed.
Scrap Directly Melted
by Fabricators 2013:
4.7 Mt-Cu
37.0%
36.0%
35.0%
World Copper Recycling Input Rate and LME Refined Price
Change
36.1%
Recycling Input Rate
35.6%
LME Refined Price
34.9%
34.2%
34.0%
33.0%
Copper Cathode
Refined from Scrap
2013 = 3.8 Mt-Cu
32.4%
33.0%
33.4%
33.8%
33.3% 33.2%
32.4%
100%
80%
60%
40%
2 0%
32.0%
0%
31.0%
-2 0%
30.0%
2003 2004 2005 2006 2007 2008 2009
2010
2011
11
2012 2013E
-40%
Lead Demand Growth
China vs Rest of the World 2002-2013
Source: ILZSG
12
The global demand for lead critically depends from recycling, mainly lead-acid batteries scrap.
America still #1 lead recycler. In China, vehicles, e-bikes and 4G telcos are driving lead use up fast.
World Refined Lead Demand 2012
Africa/
Oceania,
119,
1%
Europe, 1,622,
16%
Refined Lead from
Mines, 4,592,
44%
Asia Ex China ,
2,035,
20%
China, 4,479,
43%
Americas,
2,127, 20%
New Mines Operational 2012
Europe
7.1%
Commited New Mines + Expansions 2012-2014
Other
11.0%
Lead Mines
Capacity
Pipeline
0
100
200
300
400
500
Australia
10.9%
Refined Lead
Recycled, 5790,
56%
Mexico
Canada 4.5% Peru
1.0%
4.7%
USA
6.9%
China
53.9%
13
Lead supply contraints: slow lead mine capacity expansion, grades down. China remains #1 lead mine producer.
Zinc Demand Growth
China vs Rest of the World 2002-2013
Source: ILZSG
14
Zinc mines: main source of oversupply. Refined use 13 Mt in 2013. Mine closures 2013-2016: 1 Mt.
World Zinc Mine and Recycled Supply
Kt of Metal Content in 2012
Europe
7.7%
Zinc Scrap
Direct Melt,
2500,
17%
Zinc Mine
Production,
11478,
77%
Recycled Zinc
Refined
Production, 822,
6%
Lady Loretta, Australia (new)
Colquijirca, Peru (35kt expansion)
Langlois, Canada (reopening)
Neves Corvo, Portugal (reopening)
Peru
9.4%
China
36.0%
500
50
400
52
300
54
200
55
100
Australia
11.1%
India
5.7%
Cerro Lindo, Peru (40kt expansion)
Halfmile Lake, Canada (new)
Tizapa, Mexico (26kt expansion)
95
0
125
142
New Zinc
Mine Capacy
2012
Other
25.6%
Canada
4.5%
600
700
15
World Refined Nickel Metal Flows 2013 = 1.8 Million Tonnes
68% of world nickel supply from 4 countries.53% of demand from China
Just 22 Kt of refined nickel coming from scrap. Most recycled nickel from stainless steel scrap.
•China still relies on
imports of refined
nickel.
•Asia ex-China use
more refined nickel
16
than all Europe.
With high prices pre-2009, recycled nickel scrap provided 33% of world nickel uses.
Ferronickel mine projects: Australia, New Caledonia and Brazil.
Nickel mines and smelter projects in PNG, Myanmar
+ Salomon Islands.
Source: Nickel Institute 2008
Unit：kt（Nickel Content）
2010-2011
Global Nickel Ore Output
300
250
200
1,200
1,000
150
800
100
Nickel Projects: Global Pipeline in 2013
Nickel Content Kt
Potential Project Developments
Likely Project Developments
Committed Developments
600
50
400
2010
Cuba
Columbia
China
Brazil
New
Caledonia
Australia
Canada
the
Philippines
Russia
Indonesia
0
200
-
Ore & Concentrate
Intermediate Products
Refined products
2011
Chinese imports of nickel ore from Indonesia and Philippines ended the shortage in 2009-2012.
17
More nickel in the pipeline, but when? Massive CAPEX requirements and major technical difficulties.
Changes In Trade Regulations Cause Price Volatility
And Can Reduce Global Non Ferrous Metals Mine/Scrap Supply
Indonesia - Local Content for Mineral Exports *
January - 2014
Is China stainless steel production
vulnerable in 2014? Or enough stocks?
nickel pig iron 4%;
ferro-nickel 10%;
Copper concentrate 15%;
manganese concentrate 49%;
lateritic iron 51%;
zinc concentrate 52%;
lead concentrate 57%;
ferro-manganese 60%;
manganese silica 60%;
chromium alloy 60%.
alumina; iron ore concentrate 62%;
nickel matte 70%;
sponge iron 75%;
bauxite – 90% chemical
pig iron 90%;
alumina, 98% smelter
gold 99%;
silver 99%;
chromium 99%;
tin metal 99.9%;
* A progressive export tax will be implemented18
Export Taxes Can Induce Investments for Exports, But Not Develop Domestic Markets.
Russian Federation: from scrap and refined exporter to wire rod exporter. WTO 2015 to affect flows.
Russian Federation: Net Exports of Copper
Scrap , Refined and Fabricated Products Kt.
700
Net Refined Exports
Net Scrap Exports
Net Semifabricate Exports
600
Year 2000 ->
10% Refined Export Tax
50% Scrap Export Tax
500
400
300
200
100
0
-100
1992
1994
1996
Refined Export Tax:
Operational Suspended
1998
2000
Operational
2002
2004
2006 2008
2010
2012
Many opportunities to
develop the Russian
market for copper
products in different
sectors.
Source: Metal Bulletin Copper
Conference - Elkat
19
February 2014 Kazakhstan extended ban on export of scrap and ferrous metals waste to prevent a critical domestic shortage.
Some Environmental Regulations Can Reduce World Metal Supply More than Others
IMO: some metal ores cargo can be
harmful to marine environment now.
Air quality and lead recycling:
Mexico: 15 ug/dL . US EPA: 1.5 ug/dl.
USA ->Mexico scrap battery exports: +500%
Chile: New Emission Standard for Copper Smelters
And Sources of Arsenic Emissions (H2SO4 Plants).
Law Published: 12/December/2013
Maximum Emission Limits
Maximum Emission Levels
On Existing Sources
On Existing Sources
At the End of the Transition Period*
Effective 12/December/2013
Tonnes / Year*
Tonnes / Year*
SO2
As
SO2
Chuquicamata
49,700
476
96,500
Potrerillos
24,400
157
89,500
Caletones
47,680
130
80,000
Altonorte
24,000
126
Regional Authority Law 193
Ventanas
14,650
48
16,500
Chagres
14,400
35
13,950
Hernan Videla Lira
12,880
17
24,500
Chile
Existing
H2SO4 Plants
187,710
989
SO2
As
400 ppm
1 Mg/Nm3
320,950
PM
Hg
20
Public Sector Rent from NF Minerals: Not All Taxes Equal, Not All Companies Equal
2012 Global Contribution of the Metals Industry to
Government Revenues by Instrument %
Other, 8%
Mining Taxes, 5%
Corporate Income
Tax, 40%
Production taxes,
11%
Royalties, Fees
and Rents, 16%
People Tax, 20%
Top Global Mining Companies
2012 Tax Payments as % Of Operational Revenues
Vale SA
Rio Tinto Group
Anglo American Plc
Barrick Gold Corp
Norilsk Nickel
Freeport-McMoran
Newmonth Mining Corp
BHP Billiton Group
Codelco
0%
2%
4%
6%
8%
10%
12%
14%
Source: Joint Study Groups Report “The Impact of Fiscal Instruments on the Non-Ferrous Metals Industry” 2014
16%
21
In 2002 China was still an exporter of refined lead and zinc.
In 2014 is the main importer of refined, ore and scrap copper, nickel, lead and zinc.
China: Net Imports of Copper Raw Materials - Kt-Cu.
9,000
8,000
7,000
China Net Copper Scrap Imports Kt-Cu
China Net Copper Blister Imports Kt-Cu
China Net Refined Copper Imports Kt-Cu
China Net Copper Ore Imports Kt-Cu
6,000
5,000
4,000
3,000
2,000
1,000
0
2009
2010
2011
2012
2013
22
Instead of a rent from mineral exports, China invest in value added products using refined metal
Export taxes to raw materials and VAT tax rebates support valuable exports or inputs in short supply
China Average Import Price Paid in USD per Tonne:
Reported, January-June 2013.
Chinese export measures along the
copper value chain: 2010


HS 2603
ores
10% export tax
HS 2620
residues
10% export tax
HS 7401
matte
15% export tax

HS 7402
blister
15% export tax
8,000

HS 7404
scrap
6,000

HS 7403
refined Cu
4,000

HS 7405
master alloys
2,000

HS 7406
powders
no VAT rebate
HS 7407
bars, rods profiles
5 percentage point VAT rebate
HS 7408
wires
5 percentage point VAT rebate
HS 7409
plates, sheets, strips
9 percentage point VAT rebate
HS 7410
foil
full VAT rebate
HS 7411
tubes
5 to 13 percentage point VAT rebate
12,000

10,000
no VAT rebate
no VAT rebate
Semifabricated
Products
Refined Copper
Imports
"Copper Scrap"
Copper
Concentrate
5 to 10% export tax
no VAT rebate
10% export tax
no VAT rebate

0
15% export tax


China Copper and Alloy Semis Capacity ex Wire Mills
2012-2016 Kt
800
Not Classified
700
Ingots for Castings
600
Foil
Alloy Wire
500
RBS
400
PSS
Tubes
300
200
100
0
2013-2015 Project Pipeline
New 2012 Capacity
23
China,March 2014: refined copper cheaper than scrap: 40% rebate on 17% VAT to China scrap processors (MOF)
Rapid urbanization and industrialization in China: key driver of
non ferrous metal use growth globally in the past 10 years...
...and reason behind 4 base metals use up >12 million tonnes in 2002-2012
World Non Ferrous Metal Usage 2002-2012.
Thousand Tonnes of Metal Kt
Copper Usage
20,260
Zinc Usage
9,381
Lead Usage
6,829
12,300
10,382
2012
2002
1,659
1,175
Nickel Usage
0
5,000
25,356
10,000
15,000
20,000
25,000
30,000 24
Global non ferrous use expansion is driven by copper, lead, zinc, and less by nickel.
World Usage Volume Growth 2002-2012
Key Non Ferrous Metals Kt.
6,000
5,000
4,000
3,000
2,000
1,000
0
Nickel Usage
Zinc Usage
Lead Usage
Copper Usage
Global mine supply response to higher Chinese demand: >10 million tonnes in 10 years.
World Mine Production 2002-2012 Cu, Ni, Zn and Pb.
Kt. Metal Content.
Copper Mine
Production
13,577
Zinc Mine Production
9,174
World Mine Output Growth 2002 - 2012
in Thosand Tonnes of Metal Content (Kt)
16,697
13,149
2,178
1,248
Nickel Mine Production
Lead Mine Production
2,868
-
2,000
4,000
2012
2002
4,994
6,000
8,000
10,000 12,000 14,000 16,000 18,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
3,975
3,120
2,126
930
Nickel Mine Output
Growth
Lead Mine Output Copper Mine Output Zinc Mine Output
Growth
Growth
Growth
25
The world uses more of the 4 metals, but less copper and nickel use outside China.
16,000
12,000
World Ex-China Lead Demand
China Lead Demand
12,000
10,000
4,479
8,000
6,000
4,000
14,000
958
5,871
5,903
China Zinc Demand
World Ex-China Zinc Demand
5,400
10,000
8,000
1,560
6,000
4,000
7,338
8,008
2002
2012
2,000
2,000
-
-
2002
2012
26
2002-2012: the growth of lead and zinc used out of China was really marginal.
More stocks in metal exchanges now, but copper and nickel stocks very volatile.
In 2013 copper left LME-COMEX and moved from Chinese refineries to Shanghai ports, sold-off in 2014.
200 000
tonnes
Nickel Exchange Stocks (LME)
Copper Exchange Stocks
150 000
100 000
February 2014:
just 126 Kt on warrant in LME.
888 Kt-Cu in Shanghai warehouses
Feb 2014: >126 Kt of
nickel on warrant in LME
50 000
0
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
500 000
LM E (t)
Shanghai (t)
400 000
1600 000
LM E (t)
1400 000
Shanghai (t)
Zinc Exchange Stocks
1200 000
300 000
Feb 2014:
>582 Kt of
Zinc on
warrant
in LME
1000 000
800 000
600 000
400 000
200 000
0
Jan-06
27
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Lead Exchange Stocks
200 000
Feb 2014: >171 Kt
of lead on warrant
in LME
100 000
0
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Source: LME, SHFE, Comex. Citi @ Joint ICSG/INSG/ILSG
Refined Stocks On Warrant in LME
in January 2014 as a % of Output:
Small % of copper inventories in metal exchanges now.
recently.
Copper 0.6%
Lead 1.6%
Zinc 4.5%
Nickel 7.0%
World Refined
Production 2013 *
Copper 20,991
Lead
11,022
Zinc
13,013
Nickel 1,806
* preliminary
Official export data not always matching import data.
Refined Copper Exports Reported from China in 2012. Kt-Cu
300
250
200
150
100
50
0
Refined Exports Reported by China
Korean Republic
Others
Japan
United Kingdom
Malaysia
Hong Kong
Egypt
China
Singapore
Vietnam
Brazil
South Africa
Saudi Arabia
Thailand
India
United States
Importers: Refined from China
Taiwan
Belgium
Turkey
UAE
Netherlands
Indonesia
28
If we account changes in Shanghai port inventories: global copper deficit 2011-2013
No more global surplus of lead and zinc. Small nickel surplus ...to end in 2014?
World refined copper balance
World refined lead balance.
150
100
50
0
World refined zinc balance.
2005
-50
-100
2006
2007
2008
2009
2010
2011
2012
2013
World refined nickel balance
.
29
With a growing world economy in 2013, recyclers and miners struggled
to supply metal at low prices, so copper, zinc and lead markets in deficit.
ICSG, INSG, ILZSG 2013 World Balance
and 2014 Refined Metals Forecast
Million Tonnes of Refined Metal
2013
2013
2013
Output
Usage
Balance
Copper*
21
21.3
-0.536
Zinc
12.9
13
-0.100
Lead
11.2
11.2
-0.040
Nickel
2
1.8
0.200
* Change in Shanghai bonded cathode stocks included
4 NFM 2013
47.1
47.3
-0.476
Copper
Zinc
Lead
Nickel
2014 F
Output
22.3
13.5
11.7
1.93
2014 F
Usage
21.9
13.6
11.7
1.89
2014 F
Balance
0.435
-0.040
-0.050
0.047
4 NFM Forecast
49.43
49.09
0.392
•Will copper mine oversupply deepen in 2014?
•Will the global copper scrap shortage end in 2014?
•Will Indonesia ore ban allow a refined nickel surplus in 2014?
•Or ore stocks in Chinese ports, users and exchanges are enough?
•Will lead recycling flows allow a perfect global balance again?
•Will the expected zinc mine closures restrict supply? Or be delayed?
GDP: IMF, EU
7.8
China
7.6
7.4
7.2
7.0
2012
4.0
2013
2014F 2015F
USA
3.0
2.0
1.0
0.0
2012
2.0
2013
2014F 2015F
Japan
1.5
1.0
0.5
0.0
2012
2.0
2013 2014F 2015F
Euro Area
1.0
0.0
-1.0
2012
2013
2014F 302015F
China urbanization rate >70% just in 4 regions. Below 50% in Central and West China
The plan: urbanize ~100 million people 2014-2020 = high metal end uses to continue
China Future Power Grid
2012 Data
55% of Population In Rural Areas in 2010 (TWB)
Urbanized population %
by country as of 2006.
31
Source: UNICEF, China National Bureau of Statistics, Wood Mackenzie, China Academy of Sciences.
Copper and nickel cheaper now than 100 years ago:
in “constant US dollars” and in gold
Opportunity
Sovereign Funds Investments in Metals
Can Reduce Price Super-Cycle Volatility:
Buying the Oversupply
and Selling the Shortages.
WWI
Vietnam
War
Chile
Coup
Korean
War
WWII:
LME
Closed
China
+ZIRP
32
1966-1973 >one kg of gold per tonne of copper. 1974-2014, < 200 grams of gold per tonne of copper.
International Copper, Lead, Zinc and Nickel Study Groups
Next Refined Markets Forecast 2014-2015: October 2014.
Next Sessions
Copper and Nickel: 13-14 October 2014
Lead and Zinc: 16-17 October 2014
Join Metals Recycling Seminar: 15 October 2014
in Lisbon, Portugal
For more information please visit our websites:
www.icsg www.ilzsg.org www.insg.org
For information about how governments can joint the study groups: mail@icsg.org
Comments on this presentation to: risopatron@icsg.org
33