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Refined Copper Consumption
Global copper consumption increased from 17.5 million tons in 2006 to 17.9 million tons in 2007, then increased to 18.0 million tons
globally in 2008. The 2.6% increase from 2006 to 2007 was in part due to a recovery in Chinese demand which reflected re-stocking
throughout the whole supply chain following de-stocking in 2006, and the country’s ongoing urbanization and infrastructure development as
well as the continual demand for copper intensive products on the back of rising incomes. These last two factors were also responsible for
supporting double digit growth in Indian demand during 2007. This consumption growth was slightly offset by a decline in demand growth in
Western Europe by 6.7% and Japanese consumption by 3.0% due to a general slowdown in these economies. Consumption increased
marginally to 18.0 million tons in 2008. In 2008, renewed demand in China and India, increased by 9.0% and 5.2%, respectively, was partially
offset by a decline in demand in Western Europe and Japan, which decreased by 6.8% and 5.4 %, respectively, due to a slowdown in these
economies.
Asia (including the Middle East), Western Europe and North America together accounted for 86% of global copper consumption in 2008.
Europe and North America accounted for over 60% of copper consumption during the 1980s, but strong growth in Asia, led by China and
Japan, has since significantly changed global consumption patterns. With a compound annual growth rate of 7.2% between 2003 and 2007,
Asia has been the fastest growing copper market in the world. Strong growth in Asia (including the Middle East), Russia and the
Commonwealth of Independent States, or CIS, and Eastern European countries is expected from 2011 onwards following a recovery in demand
from the current slowdown.
The following table sets forth the regional consumption pattern of refined copper from 2005 to 2008:
Year Ended December 31,
2005 2006 2007 2008
Region Volume % Volume % Volume % Volume %
(thousands of tons, except percentages)
Rest of Asia (1) 4,171 24.6% 4,246 24.3% 4,182 23.3% 4,153 23.1%
Western Europe 3,565 21.0 3,923 22.4 3,661 20.4 3,413 19.0
China 3,815 22.5 3,967 22.7 4,600 25.7 5,014 27.9
North America 2,549 15.0 2,408 13.8 2,395 13.4 2,200 12.2
CEE (2) and CIS 1,106 6.5 1,210 6.9 1,251 7.0 1,240 6.9
Latin America 955 5.6 895 5.1 863 4.8 906 5.0
India 415 2.4 458 2.6 568 3.2 598 3.3
Africa 234 1.4 243 1.4 275 1.5 295 1.6
Oceania 155 0.9 143 0.8 148 0.8 144 0.8
Total 16,965 100.0% 17,493 100.0% 17,943 100.0% 17,963 100.0%
Notes:
(1) Rest of Asia is Asia excluding China and India, but including the Middle East.
(2) Central and Eastern Europe.
Source: Brook Hunt Copper Metal Service Report, May 2009.
Copper Supply
Global mine production is the principal source of copper, with scrap recycling accounting for only a minor part of the aggregate supplies.
The five largest copper mining countries were Chile (34.4%), the United States (8.6%), Peru (7.9%), China (6.1%) and Australia (5.7%), which
together accounted for approximately 63% of the total copper mined worldwide in 2008. Less than 50% of global copper mine production is
integrated, with the remainder sold in the custom smelting market. The five largest copper mining companies in 2008 were Corporación
Nacional del Cobre, Chile, or Codelco, Freeport-McMoRan, BHP Billiton Limited, or BHP Billiton, Xstrata AG, or Xstrata, and Rio Tinto
Alcan Ltd, or Rio Tinto.
The major smelting locations include China (20.4%), Japan (10.7%), Chile (10.6%), Russia (5.2%) and India (4.8%), which together
accounted for 51.7% of global production and thus are major importers of copper concentrate in 2008. The five largest refined copper
producing countries were China (20.6%), Chile (16.7%), Japan (8.4%), the United States (7.1%) and Russia (4.8%), which together accounted
for about 57.4% of the total copper produced worldwide in 2008. The five largest copper smelting companies in 2008 were Codelco, Xstrata,
Aurubis AG, Nippon Mining and Metals Co. Ltd and Freeport-McMoran, while the five largest copper refining companies in 2008 were
Codelco, Freeport-McMoran, Aurubis AG, Xstrata, and Nippon Mining Metals Co. Ltd.
Global refined copper production increased from 17.3 million tons in 2006 to 18.0 million tons in 2007, an increase of 4.1%, and to
18.4 million tons in 2008, an increase of 2.0% over 2007. There was a production surplus over consumption during 2007 and 2008.
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