Copper reserves on the brink of depletion?
What metal prices do not reveal
Economic recovery has led to a significant increase in copper demand. Metal prices rising at the same time suggest there are bottlenecks in the supply of the “red metal”. Repeated reports have claimed that copper will soon no longer be available, with reserves running out in the foreseeable future. However, on closer examination these fears turn out to be without foundation.
Speculation drives up the price of copper
It has to be considered that the daily metal price gives a distorted picture of the actual supply and demand situation. In fact, there are numerous speculators on the raw material markets whose business activities have a strong impact on the metal price. Raw material experts estimate that some 90 % of the copper market is dominated by speculators. Contributing to the high copper price is the fact that a lot of purchases took place in China in 2009 to build up strategic reserves.
David Threlkeld: Speculation drives up the price of copper
Copper – can be recycled time and time again
It also has to be taken into account that copper – compared to other raw materials – has a very high recycling potential. 100 % can be recycled without the loss of quality which is why more than 80 % of the copper ever produced is still in use today. In the case of copper, one consequently does not speak of “consumption“, as with fossil raw materials, but of “usage“.
Recycling - the biggest cooper mine in the world
Global copper mine production forecast to increase in 2010
One should be aware, that although there has been a significant increase in copper demand, world copper mine production during 2010 is projected to increase by 6.7 % compared to the previous year, according to the International Copper Study Group (ICSG)
ICSG forecast
Moreover, a study by the Rhenish-Westphalian Institute for Economic Research, Essen, Germany, shows that, due to technical progress in copper production, global copper reserves, i.e. economically available copper deposits, should even increase.
Wieland ensures security of supply
One thing that we consider important and would like to assure you of is that the Wieland Group ensures continuous supply by securing long-term contracts with copper producers.
We would like to continue to provide you with news and background information on the “metal” subject. You will be able to read more about the subject in our next issue of this Newsletter.
