Copper consumption is forecast to rise

Global copper consumption is forecast to rise by 1.4% per year until the year 2000, says marketing information firm Roskill of London in its report The Economics of Copper 1990. The most important issue affecting the market for copper is the adoption of fibre optic cable in preference to copper for the transmission of telecommunication signals, Roskill says. It notes there is still an extensive demand for copper cable.

In its review of the 1980s, the report finds that despite a lower annual rate of growth than in the previous three decades, copper consumption did increase substantially. Although the consumption of primary refined copper worldwide rose by only 1.7% per year, an increase in consumption of 1.6 million tonnes year was recorded.

In addition, supplies of secondary refined copper and copper scrap add a further five million tonnes to the quantity consumed. The report says that in the future, as increased supplies of scrap become available from the recycling of equipment as it is replaced, the consumption of copper scrap may increase faster than the consumption of refined copper from primary sources.

The rise of 1.4% per year in world copper consumption forecast to the end of the current decade is a lower percentage rate of increase for the 1990s than the rate achieved during the 1980s, but would result in an increase of no less than 1.8 million tonnes to 12.7 million tonnes per year, the report says.

The report examines the effect of the recession in the early 1980s, during which many of the principal producers of the metal in North America suffered severe losses and shut down their operations. Some of these projects have since been reopened and many of the previously high-cost producers have been transformed into low-cost producers.

The report points out that, because of economies made at existing mines and low production costs at mines which have been brought on stream since the recession, a large proportion of the world’s copper mines can operate profitably at prices far below US$1 per lb.

Even if the price should fall to US80 cents, a large proportion of the copper produced by private sector producers will still yield them US10-30 cents per lb. or more, and they will have no need to curtail production.

The report predicts that at the next downturn in economic growth, copper production will be much more resilient than in either of the two previous recessions, and the price may suffer accordingly.

Regarding the telecommunications market, an estimated 90% of telecommunication cables are used in the local loops which connect subscribers to the local exchange. The reports says that in the medium- term, increased demand for telecommunication channels is likely to maintain the demand for copper wire at a higher level than might be expected if the market was expanding less vigorously.

Paradoxically, the report says, the use of fibre optic cable creates additional demand for copper power cable. Substantial quantities of copper wire are used in conjunction with fibre optic cable because although fibre optic cables cannot be used to transmit electrical energy, they consume electricity in producing the light required for the signal.

While further growth in the use of fibre optic cable will reduce copper consumption in telecommunication cable, its effects will continue to be offset by the increased demand for power cable which it creates, the report points out.

Almost every building in the industrialized countries contains copper in the form of tubing and in the copper alloy taps, valves, connectors and fittings used in conjunction with the metal. The size of buildings is increasing, in the residential as much as in the commercial and industrial sectors.

The increased use of electrical and electronic machinery, and the need for additional services such as improved ventilation and air conditioning, also lead to an increased demand for copper.

The consumption of copper in cold water systems, the report says, has already been sharply reduced by the substitution of plastics. If plastics also begin to be used for hot water systems, there could be a dramatic fall in copper consumption. However, the report says copper will probably still be preferred for many hot water systems because of the ease with which copper tubing can be formed and joined on site in buildings, even in confined spaces.