Copper 02 (Nov 12 - Dec 25)

[winston]

Copper is so pricey now that aircons are switching to aluminium

The world’s top maker of air-conds, Japan’s Daikin Industries Ltd, plans to replace half of the copper in its units with aluminium by 2025.

And in China, a state researcher is working with the country’s top home-appliances groups on using more aluminium.

In China, the machines make up a big part of the 15% of copper demand that goes to home appliances.

Copper accounts for about 20% to 30% of the costs of making an aircon.

Source: Bloomberg

https://www.theedgemarkets.com/article/ ... -aluminium

[winston]

Copper

Preliminary data from China Customs trade shows that August showed further weakness in China’s copper imports.

Unwrought copper and product imports were down for a fifth consecutive month, and at 394kt marked the lowest monthly import figure since June 2019. They were also down 7% m/m and 41% y/y. Imports for the January-August 2021 period totaled 3.61Mt.

Copper prices have moved lower, weighed down by easing supply risk in Chile following recent mine wage negotiations and softening import demand from China.

Two key unions at the 185 thousand tonnes per year (ktpa) Andina mine ended the strike that started in mid-August, reaching a new wage deal last week.

Over the weekend, an agreement was also reached at the 127ktpa Cesarones mine in Chile, bringing an end to a strike that began in early August.

Meanwhile, an early agreement was reached at the 443kt El Teniente mine in Chile on 1 September following mine workers’ rejection of the previous proposal in mid-August.

Meanwhile, the latest production data shows that Peru’s copper output in July totaled 190.3kt, down 4.3% y/y but up 4.2% m/m. The decline was attributable to
maintenance at the Antamina mine and lower grades at the Antapaccay.

The latest CFTC data for the week ended 31 August shows a sharp reversal in speculative sentiment towards Comex copper, with net fund length rising after four consecutive weeks of liquidation.

Net managed money in Comex copper futures rose by 18.7k lots, the highest since 10 August, a major recovery after having dropped to the lowest since June 2020 in the previous week.

The copper cash to three-month spread moved into contango last week after having been in backwardation for the latter half of August.

LME inventories currently stand at mid-August’s levels, at 37.7kt. In contrast, the decline in SHFE copper inventories continues; inventories posted a net drawdown of 13.1kt in the week ended 3 September, and at 69.3kt are the lowest since early February.

Easing supply risk in Chile and softer China import demand have been weighing on copper prices, leading to a sharp reversal in speculative positioning in Comex copper futures.

The cash to three-month spread has lately moved into contango; LME and SHFE inventories have declined, with SHFE inventories at the lowest since 1 January while physical premiums in Europe have hit the highest since February 2015.

Meanwhile, China’s unwrought copper and product imports are the weakest since June 2019.

Source: OilPrice.com

[winston]

Copper Usage

The average EV uses almost half as much copper as the average American house, and EVs aren't the only "green" products that are "metal hogs."

Wind energy uses five to 10 times more copper per unit of electrical energy than does the conventional burning of coal .

Photovoltaic solar power uses six times more copper per unit of electrical energy.

A Tesla Model 3 requires 240 pounds of copper, which is nearly four times what a midsized internal combustion vehicle requires.

Source: Investor Place

[winston]

Copper slips as low inventories offset growth fears

by Zandi Shabalala & Mai Nguyen

LONDON (Oct 8): Copper eased on Friday as concerns over the impact of higher power prices on global growth spooked investors, although losses were capped by low inventories in exchange warehouse which pointed to solid demand.

"The only cloud hanging over copper is a worsening macro picture, but the supply picture is so tight and that is preventing the copper price from going lower," said Gianclaudio Torlizzi, partner at consultancy T-Commodity.

Exchange warehouse stocks climbed but remained at low levels. Weekly copper inventories data for warehouses monitored by the Shanghai Futures Exchange showed a rise for the first time in eight weeks, increasing by 15% to 50,062 tonnes but still hovering around 2009 lows.

"Recent developments regarding Chinese property markets and the likely impact of the energy crunch on Chinese economic activity are clear reasons to believe that demand for copper will be weaker in the near term than had been anticipated," Jefferies analysts said.

However, global exchange copper inventories are down 23% since late August and the copper price was flat over that period, the analysts said.

Source: Reuters

https://www.theedgemarkets.com/article/ ... owth-fears

[winston]

Global Energy Crisis Affecting Copper?

The global energy crisis is casting a pall over copper, as investors who are bullish on its long-term prospects fret that power shortages and factory slowdowns could trigger a retreat in the near term.

As a reliable gauge of economic health, copper is fast becoming a canary in the coal mine for analysts and academics, who fear that the surging costs of natural gas and electricity will send markets reeling.

That could unleash a bout of stagflation, where demand from consumers and manufacturers craters but the costs of goods and raw materials remain stubbornly high.

Yet energy isn't the only weight on copper, a metal that's essential for builders, automakers and electronics manufacturers.

The risk of a collapse in China's debt-addled property sector plus the ongoing economic threat posed by Covid-19's delta variant are prompting investors to pull back and wait it out on the sidelines - at least for now.

Copper's blistering rally above US$10,700 a tonne came in May as lockdown restrictions sparked insatiable demand for metals in housing and consumer goods.

Numerous traders and banks bet that prices would increase even more, theorising that the manufacturing boom would dovetail into long-term plans for electric vehicles and renewable energy.

Source: Phillips

[winston]

The Great Copper Squeeze Isn’t Over Yet

by Mark Burton

While futures prices are tumbling as the outlook for demand deteriorates, surging premiums for spot contracts point to a supply shortfall on the London Metal Exchange, with inventories near a multi-decade low.

While the global energy crisis keeps throttling metals supplies, headwinds to China’s growth are building due to the power crisis, real-estate deleveraging and coronavirus outbreaks.

Source: Yahoo Finance

https://finance.yahoo.com/news/great-co ... 18835.html

[winston]

Rystad: Copper supply deficit of six million tons by 2030 threatens renewables, EVs

by Surin Murugiah

There is currently no substitute for copper in electrical applications.

It said copper demand is projected to rise 16% by the end of the decade, reaching 25.5 million tonnes per annum (tpa) by 2030, compared with a supply forecast showing a 12% decrease versus 2021 levels.

Source: theedgemarkets.com

https://www.theedgemarkets.com/article/ ... wables-evs

[investar]

New All Time High for Copper!


https://www.mining.com/copper-price-ret ... time-high/


Stocks like Altiplano APN.V, Marimaca MARI.TO (both in Chile) or QCCU.V (Quebec Canada) or even MGG.V (Mexico) will probably profit in the next years as the world will find out there are not enough new copper mines to meet the world's growing demand

[winston]

Russian metal ban proposed

The copper committee of the London Metal Exchange, a subsidiary of the Hong Kong Exchanges and Clearing (0388), recommended banning new supplies of Russian metal from the bourse, according to people familiar with the matter, a move which would send shock waves through the market if implemented.

The exchange said it currently doesn't plan to take any action that goes beyond the scope of the Russian sanctions, such as placing restrictions on the circulation of metal produced by Russia in the LME system.

Russia is the world's seventh-largest copper producer, accounting for about 4 percent of global production. But its role on the LME is more significant, since it is the third-largest exporter of refined copper metal.

However, banning Russian metal could have an even more seismic impact in the LME's nickel and aluminum markets, where Russian producers Norilsk Nickel and United Company Rusal (0486) supply a large proportion of the tradable brands.

The LME has previously said that it would "respond swiftly" if any producer of metal registered on the exchange were to be placed under sanctions.

So far, while some buyers of metals are avoiding Russian supplies, the United States and Europe have not placed sanctions on major Russian metal producers.

Source: AP

https://www.thestandard.com.hk/section- ... n-proposed

[winston]

Copper drops to seven-month low on demand concerns, rising stocks

by Brijesh Patel

BENGALURU (May 12): London copper prices dropped to a more than seven-month low on Thursday (May 12), weighed down by demand worries and rising stocks amid ongoing lockdowns in top consumer China and fears of a global economic slowdown.

"China’s lockdowns have been significantly impacting economic activity and thus demand for base metals," commodity strategists at ANZ said in a note, adding that a higher-than-expected rise in US consumer prices in April had raised prospects of an even tighter monetary policy.

The metal, which is used as a gauge for global economic health, has fallen more than 15% from March's record high of US$10,845.

Inventories: Copper stocks in LME-registered warehouses have risen to 175,875 tonnes, their highest level since mid-October.

Stimulus: Offering some respite, a senior official of China's Communist Party said the country is eyeing new incremental policies to prop up growth and will take steps when necessary.

Source: Reuters

https://www.theedgemarkets.com/article/ ... ing-stocks