Worldwide, the copper market faces several issues like reduction in copper’s natural reserves, conflicts in mining communities, logistics, and energy issues. Volatile copper prices, demand, and supply problems need to be addressed at the International copper conference in Barcelona, Spain, on 22-23 September 2022. According to the International Copper Study Group (ICSG), globally, refined copper consumption remained at 2.2 million tons per month for January- June in 2022, which was 3.8% higher than in 2021. For only two days, copper reserves stayed with the three major exchanges to deliver.
The Chicago Mercantile Exchange’s on-warrant copper stocks fell to 33,197 tons on 13 September 2022, 37,477 tons on the Shanghai Futures Exchange, and 75,000 tons at the London Metal Exchange’s (LME), which regained after reaching the lowest point of 50,000 tons in April. Due to limitations, Russian copper is not accessible to every region.
Russian copper cathodes are not directly restricted; LME restricted these due to import duties in the UK; however, warehouses are eligible to keep in other regions. Russia exported 44% out of 991,000 tons of refined copper production in 2021, while 600,000 tons in 2022, in which exports to China remained one-third. Also, it increased the supply to Europe, i.e., Netherland and Germany.
Chili’s copper production declined by 6.59% to 3.05 million tons. Due to community protests, Peru’s Las Bambas’ productivity declined, contributing 2% of world production. ILO copper smelter and Southern Copper Corp’s Cuajone mine are in peaceful regions, but these were also affected by the protests.
Africa has a good productivity level, but logistics issues cause to interrupt the supply. The Russian copper mine facility could not start due to the non-provision of machines and other equipment. Copper prices remained $35-$55/MT from 2017-2021, which have increased to triple-digit as $85-125/MT in 2022.
China remained the largest importer of copper. Its raw copper imports remained at 3.9 million tons, an increase of 8% from January to August 2022. Due to infrastructure development, China’s scrap imports increased from $700 million to $8.6 billion. It has a plan to refill the reserves of copper, which it auctioned in 2021, for the stability of the copper market. China restricted the imports of low-grade copper to control carbon emissions.
Chinese mills are facing problems due to the energy crisis, covid lockdown, downfall in the real estate market, economic recession, and difficulty securing funds through remortgaging aluminum to run their business. Maike is the largest trader, and few mills cannot raise funds for their business; Maike will take help from the government and state-owned banks for the availability of liquidity. These are the core issues to discuss at the conference for the sustainable development of the copper market.
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