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.
1
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.
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
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
Belgium
Chile
China
European
Community
Finland
France
Germany
Greece
India
Italy
Iran
Japan
Serbia
Spain
United States
Zambia
Luxembourg
Mexico
Peru
Poland
Portugal
Russian Federation
Sweden
3
4 4 4
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
Belgium
Brazil
Bulgaria
Canada
China
Finland
France
Germany
India
Iran
Ireland
Italy
Japan
Korea Rep.
Mexico
Serbia
South Africa
Sweden
Thailand
United States
European Union
Morocco
Namibia
Netherlands
Norway
Peru
Poland
Portugal
Russian Fed.
European Union
Greece
Portugal
Brazil
France
Japan
Sweden
Australia
Finland
Italy
Russian
Federation
Cuba
Germany
Norway
United
Kingdom
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.
5
World industrial uses of refined and scrap copper, nickel, zinc and lead.
52%
16%
17%
6%
6%3%Galvanizing
Alloys
Brass and Bronze
Semis
Chemicals
Miscellaneous
77%
1%
6%
2%
3%8%
3%
Batteries
Cable Sheathing
Rolled & Extruded
Shot/Ammunition
Alloys
Pigments & Compounds
Miscellaneous
Industrial Uses of Copper
Power Cable,
Building and
Magnet Wire
40%
Copper Tube,
Rod, Plates
Foil 20%
LV, Auto, Bare
Wires 18%
Brass Mill
Alloys
17%
Foundry
Castings and
Powders 5%
Industrial Uses of Zinc
Industrial Uses of Lead
Stainless Steel63%
Plating9%
Alloy steel8%
Non ferrous alloys
8%
Foundry5%
Batteries & Other
7%
Industrial Uses of Nickel
Lead batteries:
weight vs low cost
recycling. Cars Inc. likes them.
6
Production Fabrication Manufacture End-of-Life
Management
Product Use
(Lifetime)
Copper
Stock in
Use
C&D
INEW
IEW
ELV
WEEE
MSW
Dissipative/
Dispersive
Uses
Wire Rod
Plant &
Wire Mill
Foundry
Chemical/
Powder Plant/
Electroplating
Brass Mill
Ingot
Maker
Direct Melt
(Alloyed/
Unalloyed)
Hydro-
metallur-
gical Plant
New
Scrap Old
Scrap Scrap
Trade
Other
Metal
Recycling
Loops
Disposal
High
Quality
Scrap
Low
Quality
Scrap
Alloy
Scrap
Copper Scrap
& Residues
Construc-
tion
Infra-
structure
Industrial
Equipment
Transport
Household
Appliances
Other
Uses
Mine Smelter Refinery
Solvent-
extraction
Electro-
winning
Semis
Trade
Finished
Product
Trade
End-of-Life
Product
Trade
Ore &
Concen-
trate Trade
Refined
Copper
Trade
Anode &
Blister
Trade
Refined
Copper
Copper
Semis Finished
Products
End-of-
Life
Products
Scrap Recycling
2012 Global Copper Flows 25 Mt = 16.5 Mt Mine Refined+ 3.6 Mt Scrap Refined + 4.9 Mt Direct Scrap.
Mineral
Processing
Slag &
Residues
Alloy
Ingot
Trade
New
Scrap
Abandoned
& Hoarded/
Stored
End-of-Life
Products
New Scrap
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
7
Industrial use of copper trend 2007-2012: up just in China and a few oil economies.
Country 2007 2012 Oct* Growth SourceMt Mt %
China 6.3 11.31 79.5% ICSG
United States 2.94 2.17 -26.0% ICSG
Germany 1.85 1.52 -17.7% ICSG
Japan 1.75 1.33 -23.9% ICSG
Korean Republic 1.33 1.06 -20.2% ICSG
Italy 1.75 1.03 -41.2% ICSG
Taiwan (China) 0.85 0.71 -16.4% ICSG
Spain 0.34 0.32 -4.7% ICSG
Poland 0.34 0.23 -31.4% ICSG
France 0.54 0.19 -64.5% ICSG
Slovakia 0.02 ICSG
India 0.71 0.64 -9.6% Estimate
Russian Federation 0.80 0.56 -30.2% Estimate
Turkey 0.41 0.27 -34.0% Estimate
Thailand 0.29 0.27 -5.6% Estimate
Brazil 0.37 0.23 -38.4% Estimate
Indonesia 0.20 0.22 8.5% Estimate
United Arab Emirates 0.00 0.21 100% Estimate
Saudi Arabia 0.19 0.21 8.4% Estimate
Iran 0.19 0.20 7.5% Estimate
Sample of Countries 21.1 22.7 7.4%
* 12 months before November 2012
Fabrication of Copper and Copper Alloyed Products: 2012 Versus 2007
million tonnes gross weight, other alloyed metals included
In 2012 the industrial use of copper fell 2% worldwide: falling end uses, mainly in Europe.
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 -1.9%Source: ICA/IWCC/ICSG
Global Use of Copper in Fabricated Products
annual growth 2012/2011 Copper and Alloys Gross Semifabrication in Europe
ICSG Reported Annual % Growth
17.2%
0.3%
-5.9%-5.4%
-23.3%
-8.3%-4.9%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
2007 2008 2009 2010 2011 2012 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.
2016 Global Copper Mine Capacity
Forecast, thousand tonnes copper Kt.
25.500
26.000
26.500
27.000
27.500
28.000
2013 (January) 2014 (January)
9
China: Copper Concentrate Available 2010-2013 Kt-Cu
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2010 2011 2012 2013
China: Copper in Concentrate Output
China: Copper in Concentrate Net Imports
It might be not enough stock: 2015-2017 new copper mine capacity plans down 1.5 Mt-Cu on 2013 CAPEX cuts!
2012 2013 2014 2 Years
Chile 171 342 513
China 195 71 266
DRC 104 282 386
USA 55 63 118
Peru 63 78 141
Zambia 31 53 84
Mongolia 4- 75 71
Australia 47- 61 14
Mexico 56 11- 45
Indonesia 144- 110 34-
Canada 10 52 62
Brazil 7 50 57
ROW 124 121 245
World 621 1,347 1,968
Growth 117%
Copper Mine Production: Recent AdditionsKt-Cu
Source: ICSG
10
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.
2012 2013 Vol Change % Change
KtChina 9,408 10,600 1,192.0 12.7% Jan-DecUnited States 1,748 1,755 7 0.4% ForecastGermany 1,209 1,235 26 2.2% Jan-DecJapan 1,073 1,084 11 1.1% ForecastKorean Rep. 938 975 37 3.9% ForecastItaly 834 845 11 1.3% Jan-DecTaiwan (China) 494 493 (1) -0.2% Jan-DecTurkey 457 485 28 6.2% Jan-DecUnited Arab Emirates 285 375 90 31.4% Jan-Dec
Spain 258 250 (8) -3.0% ForecastIndia Wire Rod 330 306 (25) -7.5% ForecastPoland 263 251 (11) -4.3% Jan-DecSaudi Arabia 204 205 1 0.5% Jan-Dec
France 166 155 (10) -6.2% Jan-DecEgypt 145 155 10 6.9% Jan-DecIran 95 100 6 5.9% Jan-DecOman 14 14 0 0.0% Jan-DecKuwait 9 9 0 0.0% Jan-DecMorocco 1 - (1) Jan-Dec
Reported Ex-China 8,521 8,692 170.8 2.0%
All Reporting 17,929 19,292 1,362.8 7.6%
Copper and Copper Alloy Products Semifabrication Kt-Cu Copper Content, Surveys and Estimates
United Arab Emirates 31.4%
China 12.7%
Egypt 6.9%
Turkey 6.2%
Iran 5.9%
Korean Rep. 3.9%
Germany 2.2%
Italy 1.3%
Japan 1.1%
Saudi Arabia 0.5%
United States 0.4%
Oman 0.0%
Kuwait 0.0%
Taiwan (China) -0.2%
Spain -3.0%
Poland -4.3%
France -6.2%
India Wire Rod -7.5%
2013 Annual Growth %
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.
Copper Cathode
Refined from Scrap
2013 = 3.8 Mt-Cu
Scrap Directly Melted
by Fabricators 2013:
4.7 Mt-Cu
World Copper Recycling Input Rate and LME Refined Price
Change
32.4%33.0%
33.4%
36.1%
34.9%
35.6%
32.4%
34.2%33.8%
33.3% 33.2%
30.0%
31.0%
32.0%
33.0%
34.0%
35.0%
36.0%
37.0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E
-40%
-20%
0%
20%
40%
60%
80%
100%
Recycling Input Rate
LME Refined Price
11
12
Lead Demand Growth China vs Rest of the World 2002-2013
Source: ILZSG
China, 4,479,
43%
Americas,
2,127, 20%
Europe, 1,622,
16%
Africa/
Oceania,
119,
1%
Asia Ex China ,
2,035,
20%
World Refined Lead Demand 2012
World Refined Lead Mined and Recycled - Kt. 2012
Refined Lead
Recycled, 5790,
56%
Refined Lead from
Mines, 4,592,
44%
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.
Peru 4.7%
USA 6.9%
China 53.9%
Australia 10.9%
Other 11.0%
Europe 7.1% Canada
1.0%
Mexico 4.5%
0 100 200 300 400 500
Lead Mines
Capacity
Pipeline
New Mines Operational 2012
Commited New Mines + Expansions 2012-2014
Lead supply contraints: slow lead mine capacity expansion, grades down. China remains #1 lead mine producer. 13
14
Zinc Demand Growth China vs Rest of the World 2002-2013
Source: ILZSG
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
Zinc Mine
Production,
11478,
77%
Recycled Zinc
Refined
Production, 822,
6%
Zinc Scrap
Direct Melt,
2500,
17%
Peru 9.4%
China 36.0% Australia
11.1%
Other 25.6%
Europe 7.7%
Canada 4.5%
India 5.7%
142
125
95
55
54
52
50
0 100 200 300 400 500 600 700
New Zinc
Mine Capacy
2012
Lady Loretta, Australia (new) Cerro Lindo, Peru (40kt expansion)Colquijirca, Peru (35kt expansion) Halfmile Lake, Canada (new)Langlois, Canada (reopening) Tizapa, Mexico (26kt expansion)Neves Corvo, Portugal (reopening)
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 than all Europe.
16
With high prices pre-2009, recycled nickel scrap provided 33% of world nickel uses.
17
Source: Nickel Institute 2008
0
50
100
150
200
250
300
Indonesia
Russia
the
Phili
ppin
es
Canada
Austr
alia
New
Cale
donia
Bra
zil
Chin
a
Colu
mbia
Cuba
2010 2011
Unit:kt(Nickel Content)
2010-2011
Global Nickel Ore Output
Chinese imports of nickel ore from Indonesia and Philippines ended the shortage in 2009-2012. More nickel in the pipeline, but when? Massive CAPEX requirements and major technical difficulties.
Ferronickel mine projects: Australia, New Caledonia and Brazil.
Nickel mines and smelter projects in PNG, Myanmar + Salomon Islands.
Nickel Projects: Global Pipeline in 2013
Nickel Content Kt
-
200
400
600
800
1,000
1,200
Ore & Concentrate Intermediate Products Refined products
Potential Project Developments
Likely Project Developments
Committed Developments
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
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 implemented
Is China stainless steel production
vulnerable in 2014? Or enough stocks? 18
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.
19
Refined Export Tax:
Operational Suspended Operational
Many opportunities to
develop the Russian
market for copper
products in different
sectors. Source: Metal Bulletin Copper
Conference - Elkat
February 2014 Kazakhstan extended ban on export of scrap and ferrous metals waste to prevent a critical domestic shortage.
Russian Federation: Net Exports of Copper
Scrap , Refined and Fabricated Products Kt.
-100
0
100
200
300
400
500
600
700
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Net Refined Exports
Net Scrap Exports
Net Semifabricate Exports
Year 2000 ->
10% Refined Export Tax 50% Scrap Export Tax
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%
Some Environmental Regulations Can Reduce World Metal Supply More than Others
Effective 12/December/2013
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
Ventanas 14,650 48 16,500
Chagres 14,400 35 13,950
Hernan Videla Lira 12,880 17 24,500
Chile 187,710 989 320,950
Existing SO2 As PM Hg
H2SO4 Plants 400 ppm 1 Mg/Nm3
Regional Authority Law 193
Law Published: 12/December/2013
Maximum Emission Levels
On Existing Sources
Tonnes / Year*
Chile: New Emission Standard for Copper Smelters
And Sources of Arsenic Emissions (H2SO4 Plants).
At the End of the Transition Period*
Maximum Emission Limits
On Existing Sources
Tonnes / Year*
20
Top Global Mining Companies
2012 Tax Payments as % Of Operational Revenues
0% 2% 4% 6% 8% 10% 12% 14% 16%
Codelco
BHP Billiton Group
Newmonth Mining Corp
Freeport-McMoran
Norilsk Nickel
Barrick Gold Corp
Anglo American Plc
Rio Tinto Group
Vale SA
Source: Joint Study Groups Report “The Impact of Fiscal Instruments on the Non-Ferrous Metals Industry” 2014
2012 Global Contribution of the Metals Industry to
Government Revenues by Instrument %
Corporate Income
Tax, 40%Production taxes,
11%
Royalties, Fees
and Rents, 16%People Tax, 20%
Mining Taxes, 5% Other, 8%
Public Sector Rent from NF Minerals: Not All Taxes Equal, Not All Companies Equal
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.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2009 2010 2011 2012 2013
China Net Copper Scrap Imports Kt-CuChina Net Copper Blister Imports Kt-CuChina Net Refined Copper Imports Kt-CuChina Net Copper Ore Imports Kt-Cu
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.
0
2,000
4,000
6,000
8,000
10,000
12,000
Semifabricated
Products
Refined Copper
Imports
"Copper Scrap" Copper
Concentrate
China Copper and Alloy Semis Capacity ex Wire Mills
2012-2016 Kt
0
100
200
300
400
500
600
700
800
2013-2015 Project Pipeline New 2012 Capacity
Not Classified
Ingots for Castings
Foil
Alloy Wire
RBS
PSS
Tubes
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
no VAT rebate
HS 7404 scrap 15% export tax
no VAT rebate
HS 7403 refined Cu 5 to 10% export tax
no VAT rebate
HS 7405 master alloys 10% export tax
no VAT rebate
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
China,March 2014: refined copper cheaper than scrap: 40% rebate on 17% VAT to China scrap processors (MOF) 23
Rapid urbanization and industrialization in China: key driver of
non ferrous metal use growth globally in the past 10 years...
World Non Ferrous Metal Usage 2002-2012.
Thousand Tonnes of Metal Kt
1,175
6,829
9,381
20,260
1,659
10,382
12,300
25,356
0 5,000 10,000 15,000 20,000 25,000 30,000
Nickel Usage
Lead Usage
Zinc Usage
Copper Usage
2012
2002
...and reason behind 4 base metals use up >12 million tonnes in 2002-2012
24
World Usage Volume Growth 2002-2012
Key Non Ferrous Metals Kt.
0
1,000
2,000
3,000
4,000
5,000
6,000
Nickel Usage Zinc Usage Lead Usage Copper Usage
Global non ferrous use expansion is driven by copper, lead, zinc, and less by nickel.
World Mine Production 2002-2012 Cu, Ni, Zn and Pb.
Kt. Metal Content.
2,868
1,248
9,174
13,577
4,994
2,178
13,149
16,697
- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000
Lead Mine Production
Nickel Mine Production
Zinc Mine Production
Copper Mine
Production
2012
2002
Global mine supply response to higher Chinese demand: >10 million tonnes in 10 years.
World Mine Output Growth 2002 - 2012
in Thosand Tonnes of Metal Content (Kt)
930
2,126
3,120
3,975
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Nickel Mine Output
Growth
Lead Mine Output
Growth
Copper Mine Output
Growth
Zinc Mine Output
Growth 25
The world uses more of the 4 metals, but less copper and nickel use outside China.
7,338 8,008
1,560
5,400
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2002 2012
China Zinc Demand
World Ex-China Zinc Demand
958
4,479
5,9035,871
-
2,000
4,000
6,000
8,000
10,000
12,000
2002 2012
World Ex-China Lead Demand China Lead Demand
2002-2012: the growth of lead and zinc used out of China was really marginal. 26
27
0
100 000
200 000
300 000
400 000
500 000
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
LM E (t) Shanghai (t)
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.
Copper Exchange Stocks
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
1 600 000
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
LM E (t) Shanghai (t)
Zinc Exchange Stocks
Lead Exchange Stocks
0
50 000
100 000
150 000
200 000
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
tonnes
Source: LME, SHFE, Comex. Citi @ Joint ICSG/INSG/ILSG
Nickel Exchange Stocks (LME)
Feb 2014: >126 Kt of nickel on warrant in LME
Feb 2014:
>582 Kt of
Zinc on
warrant in LME
Feb 2014: >171 Kt
of lead on warrant in LME
February 2014:
just 126 Kt on warrant in LME.
888 Kt-Cu in Shanghai warehouses
World Refined
Production 2013 *
Copper 20,991
Lead 11,022
Zinc 13,013
Nickel 1,806
* preliminary
Refined Stocks On Warrant in LME
in January 2014 as a % of Output:
Copper 0.6%
Lead 1.6%
Zinc 4.5%
Nickel 7.0%
Official export data not always matching import data.
Refined Copper Exports Reported from China in 2012. Kt-Cu
0
50
100
150
200
250
300
Refined Exports Reported by China Importers: Refined from ChinaKorean Republic Malaysia Singapore Saudi Arabia Taiwan UAE
Others Hong Kong Vietnam Thailand Belgium Netherlands
Japan Egypt Brazil India Turkey Indonesia
United Kingdom China South Africa United States
Small % of copper inventories in metal exchanges now.
recently.
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?
-100
-50
0
50
100
150
2005 2006 2007 2008 2009 2010 2011 2012 2013
World refined nickel balance.
World refined zinc balance.
World refined copper balance
World refined lead 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.
0.0
1.0
2.0
3.0
4.0
2012 2013 2014F 2015F
USA
7.0
7.2
7.4
7.6
7.8
2012 2013 2014F 2015F
China
0.0
0.5
1.0
1.5
2.0
2012 2013 2014F 2015F
Japan
-1.0
0.0
1.0
2.0
2012 2013 2014F 2015F
Euro Area
GDP: IMF, EU
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
4 NFM 2013 47.1 47.3 -0.476
2014 F 2014 F 2014 F
Output Usage Balance
Copper 22.3 21.9 0.435
Zinc 13.5 13.6 -0.040
Lead 11.7 11.7 -0.050
Nickel 1.93 1.89 0.047
4 NFM Forecast 49.43 49.09 0.392
ICSG, INSG, ILZSG 2013 World Balance
and 2014 Refined Metals ForecastMillion Tonnes of Refined Metal
* Change in Shanghai bonded cathode stocks included
•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? 30
31
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
Source: UNICEF, China National Bureau of Statistics, Wood Mackenzie, China Academy of Sciences.
Urbanized population %
by country as of 2006.
China Future Power Grid
2012 Data 55% of Population In Rural Areas in 2010 (TWB)
Copper and nickel cheaper now than 100 years ago:
in “constant US dollars” and in gold
1966-1973 >one kg of gold per tonne of copper. 1974-2014, < 200 grams of gold per tonne of copper.
Opportunity Sovereign Funds Investments in Metals
Can Reduce Price Super-Cycle Volatility:
Buying the Oversupply
and Selling the Shortages. WWI
WWII:
LME Closed
Korean War
Vietnam
War
Chile Coup
China +ZIRP
32
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: [email protected]
Comments on this presentation to: [email protected]
33