Conditions of Copper Industry in 2004
Of all the materials used by man, copper has been the oldest and very important.
What make copper a material of choice are the outstanding characteristics, such as its
excellent conductivity (after silver) of heat and electricity, corrosion resistance, ductility and
malleability, ability to be well-alloyed with other metals, and ability to recycle as well.
Result from these characteristics, copper has played, and continues to play a vital role in
contributing to the related industries including electrical and electronics industry constituting
50% of total copper consumption quantity nationwide. Examples of copper-material products
are electric wire, electronics circuit board, electrical motor, communicating devices, and so
on. Copper can be used in machinery industry such as valves used in factory and pipes for
heater and cooling systems, casting industry, production of motor car parts, electric wires,
coins, construction industry, etc.
Copper industry can be classified into 3 production types.
1. Primary production consists of several stages refining copper content from ore
or bringing used copper scrap to re-melt. Once copper has been re-melted, it can be turned
into pure copper cathode, which is the primary raw material that can be processed into needed
figures of related industries.
2. Intermediated production is bringing copper cathodes to process into needed
figures as follows.

Wire rod is a circle coil with ½ inch diameter and can be shorten into needed

Billet is a lump with 8 inches diameter and can be processed further into
size.
smaller size of tube, rod and bar.

Cake or slap is a piece with 8 inches wide and 28 inches long and can be
further hot or cold rolled into plate, sheet, strip, foil at needed size.

Ingot is a copper chunk that is mostly used in alloy casting processes.
3. Final production is bringing semi-finished copper such as wire, sheet and tube
to be produced into finished goods to consumers.
Production processes of full-cycled copper industry are presented below:
Concentrating
S m e l t i n g
&
P u r i f y i n g
Casting
1. World Conditions of Copper in World Market
1.1 Production
Country
Mining
Smelting
Chili
4,900,000
1,542,400
U.S.
1,120,000
539,000
Indonesia
978,690
247,400
Peru
831,223
314,228
Australia
830,000
435,000
Russia
675,000
840,000
China
610,000
1,700,000
Canada
557,565
456,905
Japan
700
1,516,077
Germany
494,100
Zambia
330,000
250,000
Others
3,096,822
3,964,890
Total
13,600,000
12,300,000
Source: US geological survey minerals yearbook 2003
Unit: Metric tons
Refining
2,900,000
1,310,000
223,300
517,046
484,000
840,000
1,800,000
456,905
1,430,365
597,000
349,800
4,291,584
15,200,000
From the table presented above, Chili, China, Japan and U.S. are the world’s leading
copper producers. They can produce 2.9 million tons, 1.8 million tons, 1.4 million tons and
1.3 million tons of pure copper, respectively. In Thailand, most copper productions are for
serving and supporting domestic ending industries such as copper and brass pipes, electric
wire factories, and foundry, using imported unformed copper materials. Thailand has
established one copper cathodes factory named Thai Copper Industry Public Company
Limited. It has commercially operated with the capacity of 160,000 tons per annum.
Production Problems
In 2004, the copper price, especially price of copper cathode, in the world market has
increased quite a lot. In January 2004, the price of copper cathode is US$ 2,400 per ton,
while in December 2004, the price has increased to US$ 3,200 per ton. One of important
factors affecting the increasing price is the continual increase in copper demand of China. As
a result, the domestic production relying on import has faced the challenge of high production
cost and dynamic change of pricing. Although at this time there is commercial cathode
producer in Thailand, the production volume by such producer is not sufficient for domestic
demand at all. To be acceptable and increase the competitiveness in the long run, the
producers and users should cooperate with each other to continuously improve the quality of
product.
2. Marketing
2.1 Domestic Market
The demand volume of copper products in 2004 is 287,065 tons increasing from
228,264 tons of 2003, or by 25.76%. The need of copper products in related industries
continues to increase, as seen in many products that have copper as raw material in electrical
appliance industry. Such products are air-conditioner, refrigerator, motor and electric wire,
which have an increasing production index compared to 2003 by 40%, 17% and 30%
respectively.
2.2 Foreign Market
Import
Table 1: Comparison of import quantity of copper in 2003 and 2004
Quantity: Metric tons
Value: Million Baht
2002
2003
2004
% Changing rate
Products
QTY
Copper Matte
and Cement
Value
QTY
Value
QTY
Value
QTY
Important
import source
Value
176
3
0.7
0.3
0.7
0.3
0.00
4,245
208
4,756
360
6,559
608
37.91
68.89 U.S,
Hong Kong
195,465
14,153
217,015
16,242
282,312
27,837
30.09
71.39 Australia,
Zambia,
Indonesia,
India
Powders &
Flakes
559
101
587
118
721
167
22.83
41.53 Japan, U.S.,
Germany, UK
Bars, Rods,
Profiles
6,202
692
7,705
888
7,733
1,255
0.36
Copper Wire
36,362
2,837
45,420
4,170
52,435
6,837
15.44
63.96 Indonesia,
Korea
Plates, Sheets,
Strip
26,365
3,956
28,731
4,585
34,989
7,026
21.78
53.24 Japan
Foil
14,154
2,881
14,516
3,524
15,847
4,159
9.17
9,619
1,649
11,578
1,953
13,777
2,698
18.99
38.15 Malaysia
293,147
26,480
330,308
31,840
414,373
50,587
25.45
58.88 Japan,
Indonesia,
Australia
Scrap
Unwrought,
Cathode, Billet
Tubes, Pipes,
Fittings
Total
Source:
0.00 Japan
41.33 Japan
18.02 Japan, Taiwan
1. Bureau of Primary Industries, Department of Primary Industries and Mines
2. Customs Department
Remark: excluding finished products such as kitchen utensils, spring, etc.
From the table presented above, the import quantity of copper as a whole in 2004
comparing to 2003 has increased by 83,533 metric tons or 18,747 million baht. Most
imported coppers are unwrought constituting 55% of total import value. The important
import sources are Japan, Indonesia, Australia and Taiwan, respectively.
Export
Table 2: Comparison of export quantity of copper in 2003 and 2004
Quantity: Metric tons
Value: Million Baht
2002
2003
2004
% Changing rate
Products
QTY
Value
QTY
Value
QTY
Value
QTY
Important
export source
Value
-
-
-
-
-
-
-
22,449
1,251
54,920
2,181
51,322
4,546
-6.55
181
20
659
52
5,169
603
Powders &
Flakes
50
11
59
14
94
20
59.32
42.86 Dominican
Republic,
Taiwan,
Pakistan
Bars, Rods,
Profiles
9,812
907
7,886
751
10,185
1,359
29.15
80.96 Taiwan,
Hong Kong
571
163
612
168
889
168
45.26
0.00 Japan, U.S.
Plates, Sheets,
Strip
1,812
141
3,551
474
20,940
1,011
489.69
Foil
7,862
983
6,761
834
7,390
883
9.30
Tubes, Pipes,
Fittings
25,189
3,678
27,596
3,865
31,319
5,551
13.49
43.62 Malaysia,
India, Saudi
Arabia, U.S.
Total
67,926
7,154
102,044
8,339
127,308
14,141
24.76
69.58 Japan, China,
U.S.
Copper Matte
and Cement
Scrap
Unwrought,
Cathode, Billet
Copper Wire
Source:
-
-
108.44 China, Japan
684.37 1,059.62 Japan, Vietnam
113.29 Malaysia,
China
5.88 China, Japan,
Malaysia,
Indonesia
1. Bureau of Primary Industries, Department of Primary Industries and Mines
2. Customs Department
Remark: excluding finished products such as kitchen utensils, spring, etc.
From the table presented above, the export quantity of copper as a whole in 2004
comparing to 2003 has increased by 25,264 metric tons or 5,802 million baht. Export value
of copper tubes & pipes and fittings, and copper scrap is good constituting 39% and 32% of
total export value, respectively. The important export markets are Japan, China and U.S.
consistent with the previous year.
3. Summary
In 2004 the production in copper industry has increased. The import quantity of
unwrought copper used as basic raw material in the copper industry is 282,312 metric tons (of
which is 26,258 metric tons of copper cathode) increasing by 30% compares to 217,015
metric tons of 2003. Such copper cathode has been processed further to use in related
industries such as electrical appliance industry, motor vehicle parts industry, electric wire
industry, etc. Also, these industries have expanded well.
At this time, Thailand has a potential to produce copper cathode domestically so the
creation of linkage among upstream, midstream and downstream industries in order to
develop quality of products together and set the acceptably reasonable prices would reduce
the import quantity of copper cathode, and large amount of increasingly important imported
material. The linkage also increases copper production potential as the whole system by
decreasing the production cost and delivery time, and motivate foreign investors to increase
more fund in Thailand. In addition, copper entrepreneurs should continuously improve their
product quality and standard to add value in the products by applying management concepts
and information technology to increase their productivity and decrease the costs along with
continual improvement concepts. Examples of such concepts are Total Quality Management
(TQM), Cleaner Production, Lean Manufacturing, etc. Adaptation such techniques might
help to maintain their existing customers and penetrate into new markets concurrently,
prepare strategies to cope with Free Trade Area (FTA) discussion with foreign countries, and
increase opportunities to compete in foreign markets as well. Unless improving their
productivity, domestic entrepreneurs could lose their market shares to the imported goods.
Another important thing that entrepreneurs should be concerned along with
management techniques discussed above is the recycling process of copper scrap in order to
efficiently use the material, which is the way to add value to the firms. In 2004, the export
value of copper scrap is 51,322 metric tons and this amount is likely to increase every year,
while the import quantity of copper material such as copper cathode is in huge amount and
increasing every year as well. Therefore, copper recycling by smelting and refining methods
can be the way to reduce imported copper.
4. Trend
In 2005, it is expected that copper industry would continue to grow favorably because
of continuous growth in related industries such as electrical appliance industry, motor vehicle
industry, etc. In addition, the expansion of infrastructure such as electrical system and
telecommunication network would result in a greatly increasing demand for copper.
However, the increased quantity of copper in world market and low level of copper inventory
in LME market could be the factors that contribute to the increasing price of copper in 2005.
Mr. Danuruj Winmun
Industrial Sector 2, Sectoral Industry Policy
Bureau 1
Office of Industrial Economics
June 2005