Key Facts About Copper Supply and Demand – How the EM and Global Copper Miners Trade

CopperWe have written widely about copper (CPER, quote) prices and trading the underlying miners at a time when spot copper prices have faced heavy selling pressure. There is a massive wave of new copper production coming on line in 2014 and 2015 if all projects in the pipeline come to fruition and hit production targets. 

Here is a quick synapsis of dynamics driving the copper market.  Drop these sector bullet points into your specific analysis of copper miners which should be done on a company by company basis.  Although the sector trades together, not all miners are created equally.·       

  • China is 40% of the worlds copper demand and their demand continues to grow 6-8% a year       
  • 1m metric tonnes of new copper supply is required to be produced each year to keep up with copper demand       
  • 60% of the new copper supply will come annually from Peru and Chile in the next 5 years·        Copper is predicted to be in surplus (production supply more than demand) in 2014 by 400k metric tonnes but this depends on production targets being met; many projects in Chile and Peru are facing energy and logistics constraints       
  • Stoppages at copper mines cost about 800k tonnes a year from 2003-2009 due to labor disruptions, and weather according to Blooomberg

Here is your basket of global copper miners to review:  KGHM (KGHA, quote), Antofogasta (ANFGY, quote), Rio Tinto (RIO, quote), BHP Billiton (BHP, quote),  Freeport McMoRan (FCX, quote), Teck Resources (TCK, quote), Kazakhmys (KAZ, quote), Vedanta Resources (VED, quote), Norilsk Nickel (GMKN, quote),  Xstrata (XSRAY, quote) and Grupo Mexico (FMX, quote).

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