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Global Copper Demand Remains Strong, Mostly Driven By China -Rio Tinto US Copper CFO
Sep 16,2011 13:49CST
industry news
Source:SMM
Global copper demand will remain strong in the coming years, underpinned by rising demand from emerging markets, especially China, Rio Tinto U.S. Copper Chief Financial Officer Kay Priestly said.

SHANGHAI, Sep 15, 2011 (Dow Jones ) -- Global copper demand will remain strong in the coming years, underpinned by rising demand from emerging markets, especially China, Rio Tinto U.S. Copper Chief Financial Officer Kay Priestly said Friday.

Global demand will likely remain strong in the medium and long term, "despite some volatility...and mine supply is a constraint, " Kay Priestly told a Metal Bulletin conference.

Total global demand for refined copper is expected to rise by more than 40% to 27 million tons by 2020, Priestly said, citing a forecast from Brook Hunt, an industry consulting publication owned by Wood Mackenzie Company.

China will remain the main driver for global copper demand, she said, noting that Chinese consumption is shifting to construction- and consumer-focused from infrastructure-focused in step with the country's industrialization and urbanization.

China will have built between 4 million and 5 million new buildings between 2005 and 2025, by which time it is forecast to account for more than half of global copper demand, Priestly said.

The power generation sector accounts for more than 59% of China's end use of copper, Priestly said.

China's electricity generation capacity will more than double by 2025, while renewable energy sources with higher copper intensities will make up a large portion of the energy mix.

With limited domestic resources, China will remain dependent on imports, which will rise by around 6% a year over the next 10 years, she said.

China will continue to buy more scrap copper from overseas markets, such as the U.S. and Europe as its own scrap generation is limited and Chinese smelters will use increasing quantities of recycled copper, she said, adding that the country's current scrap copper capacity is 600,000 tons a year.

"New Asian mines will be well-positioned to meet demand from China going forward," Priestly said, noting that 14% of reported global copper reserves are in Asia, and by 2020, 20% of additional production will come from Asian projects--including Mongolia's Oyu Tolgoi project, which is expected to produce around 450,000 tons of copper and 330,000 troy ounces of gold a year.

Rio Tinto U.S. Copper's parent, Rio Tinto PLC (RIO) operates Oyu Tolgoi, the largest of the Asian projects. It is also an indirect owner in the project through its 48.5% stake in Canada-based Ivanhoe Mines Ltd. (IVN, IVN.T).

 

strong global copper demand;rising Chinese demand

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