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Copper

Copper, one of the first metals known to humans and historical evidence suggest that copper was mined in the Tigris-Euphrates valley as long ago as the 5th Century B.C. The use of copper in ancient times was more extensive than any other metal particularly for tools, implements and weapons. The symbol for copper is Cu and comes from the Latin cuprum.
 
Copper is a soft and pliable in its pure form and its mixed with a number of other metals and used for various industrial as well as domestic applications. It is a good conductor of heat and electricity. Copper is a slow corrosive metal. It doesn’t react with water but reacts to atmospheric oxygen and forms a layer on the surface. Hence, the corrosion is restricted to the top layer and doesn’t spread extensively as in the case of iron.
 
Important Uses:
Copper is widely used in industrial applications ranging from defense, space programme, railways, power cables, mint, telecommunication cables, etc. In addition, copper is essential element for all living organisms in traces as a dietary mineral. Copper compounds are also used in fungicides and wood preservatives.  
 
Products: cathodes, wire rods, billets, ingots, tube, sheet, plate, strip, castings, powder and other shapes. Alloy semis for downstream industries such as automobiles, appliances, electronics etc,
 
Mineral Sources:
Although copper can be found free in nature the most important sources are the minerals cuprite, azurite, malachite, chalcopyrite, chalcocite and bornite. These ores contain about 0.5 to 2% of copper. Approximately 80% of the world’s primary copper originates in sulfide ores and the rest is in the form of silicates, sulfates, carbonates and oxides.
 
Production: The ores are extracted by either traditional mining or by leaching. Copper is manufactured in three steps.
Concentration of the ore  ⇒  conversion of sulfides and other copper compounds to copper   ⇒  purification of copper by electrolysis
 
Primary production of copper accounts for about 70% and the rest of the 30% come from recycling of secondary sources and scrap materials. Secondary sources of copper are alloys with high copper content.
 
World Scenario
 
World copper reserves reported to have assessed at 680 million tons in terms of copper content within them. Chile has the largest share of about 27.94% of world reserves, followed by Australia with 12.65%, Peru with 11.18%, USA with 5.73%, Mexico with 5.59%, China and Russia with 4.41% share each as reported by the Indian Bureau of Mines.
 
Mine production of copper largely remained stable at around 16 million tons during 2009 to 2011 as per the latest estimates of the US Geological Survey (USGS). On the other hand, world refined copper production is increasing but at a slow pace of 2-3% per annum between 2007 and 2013. According to the estimates of International Copper Study Group, refined copper output stood at 20.1 million tons in 2012 and is expected to move up to 21 million tons in 2013.
 
Table 1: World copper production (1000 tons)

 
2009
2010
2011
2012
Chile
5394
5419
5260
5370
China
1070
1200
1310
1500
Peru
1276
1247
1240
1240
U.S.
1180
1110
1110
1150
Australia
854
870
958
970
Russia
676
703
713
720
Zambia
698
686
668
675
World
15500
15600
16100
17000

Source: USGS
 
Among various countries produced, Chile occupies the first place in case of mine production accounting for about 33% whereas China occupies the first place with about 27% in terms of refined copper production.
 
Use of refined copper is estimated at about 21.3 million tons as per the latest data available with the ICSG. The recent world trends in suggest that the use and production of refined copper are moving rather close.
 
 
           
 
Use of copper is the highest in Asian countries particularly in China. Europe accounts for about 20% followed by Americas with 16% of total use of copper in the world. Electricity industry is the largest using industry of copper in the world followed by construction and transport industries.
           
Table 2: Trends in world production and use of refined copper (1000 tons)

 
Production
Use
Stocks
2008
18214
17888
1102
2009
18249
17894
1376
2010
18984
19129
1199
2011
19596
19697
1210
2012
20128
20386
1381
2013
20995
21267
1336

Source: ICSG
 
 
Domestic Scenario
 
Copper production in India is not enough to meet domestic consumption requirements and is supplemented with imports to a large extent. India is the 7th largest producer of refined copper although it lags much behind in terms of mine production. Copper mine production in India is primarily concentrated in Madhya Pradesh, Rajasthan and Jharkhand states.
 
Primary copper is produced manly by three companies - Hindustan Copper Ltd (HCL), Sterlite Industries (India) Ltd and Hindalco Industries Ltd. HCL is the public sector company and it produces primary and refined copper using both indigenous and imported concentrates as well as scrap. Whereas Hindalco and Sterlite industries are private sector companies mostly rely on imported concentrates. Apart from these, Jhagadia Copper Ltd also produces copper but only from the secondary process.
 
Table 3: Trends in copper production in India (tons)

 
Mine
Smelter
Refined
2010
37656
678500
661440
2011
38051
707171
677595
2012
38056
781500
705312
2013
38166
661500
600500
2014
39000
738500
732500

Source: Thomson Reuters as estimated in Feb 2014
 
Hindalco Copper Ltd has the largest annual capacity of 5 lakh tons of copper smelters followed Sterlite industries by with 4 lakh tons of copper smelters, HCL with 51.5 thousand tons and Jhagadia with 50 thousand tons.
 
Recycling of copper is increasing all over the world and a similar pattern is noted in India. However, the scrap market in India is highly unorganized and difficult to keep a track.
 
 
 
Per capita consumption of copper in India is much lower at 0.5 kg per annum than 3.3kg per annum in Russia, 5.4 kg per annum in China and about 9-10 kg per annum in developed countries.
 
Major industrial sectors using copper in India are electrical & telecom with 56% share followed by transport with 8%, construction with 7%, consumer durables with 7% and engineering goods with 6% share in the total use.
 
Major Markets
 
Spot markets: Mumbai, Delhi
 
Futures markets:
International: LME, Comex, SHFE
Domestic: MCX, NDEX, ACE, NMCE and ICEX.
 
 
External Trade
 
India’s external trade in copper is in a number of forms ranging from copper ore and concentrates to refined copper, copper & alloys, brass & bronzes, scrap, cement, copper, mattes, blister, bars, rods plates, etc.
 
Major export destinations: Liberia for ores & concentrates and China for refined copper
 
Major import sources: Ores & concentrates from Chile, Australia, Indonesia and Brazil.
                        Refined copper from Bhutan, Zambia, Ukraine and Chile.
 
 
 
Factors Influencing Prices
 
·         Largely governed by the international markets and their price trends
 
·         Growth and performance of major utilizing industries
 
·         Government policies on trade both direct (restrictions) and indirect (taxes).
 

 

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