Copper metals and alloys have considerable commercial importance due to their electrical, mechanical and physical properties. Copper is used in alloys such as brass which is composed of zinc and copper. Copper for commercial purposes is obtained by the reduction of copper compounds in ores and by electrolytic refining.

Copper prices moved lower in the summer of 2002 and appeared to reach a low in October. Copper is an industrial metal and reacts to the ongoing economic outlook. In mid 2002, the outlook for the economy in both the U.S. and much of the rest of the world was not overly positive though there remained bright spots which acted to support prices. In particular, multi-year low interest rates supported housing construction and renovation. These sectors consume large amounts of copper. The auto sector also remained strong supported by low interest rates. The overall economic outlook appeared to be improving and copper prices moved off the October lows and rallied. One of the ongoing problems in the copper sector has been an accumulation of warehouse stocks at the exchanges where copper is traded. Stocks at the London Metals Exchange, COMEX in New York and the Shanghai Futures Exchange all increased adding to the pressure on prices. Even with this, the longer term outlook in the copper market remained positive as it was expected that world consumption would begin to exceed production. Major copper producers had previously announced that they were reducing production while the global economy was expected to strengthen.

The U.S. Geological Survey reported that world mine production of copper in 2001 was 13.2 million metric tonnes, unchanged from 2000. The largest producer of copper by far was Chile with 2001 output of 4.65 million tonnes, up 1 percent from the previous year. The U.S. is the second largest producer of copper with 2001 output of 1.34 million tonnes, down 7 percent from the previous year. Production by Indonesia in 2001 was 1.08 million tonnes, up 7 percent from the previous year. Other large producers include Australia, Canada, and China. World reserves of copper are estimated to be 340 million tonnes.

U.S. mine production of copper in July 2002 was 92,700 tonnes. In the January-July 2002 period, copper production totaled 661,000 tonnes. Refinery production of copper in July 2002 was 123,000 tonnes while in January-July 2002 it was 851,000 tonnes.

U.S. apparent consumption of copper in June 2002 was 241,000 tonnes while for all of 2001 it was 2.5 million tonnes. U.S. consumption of refined copper in July 2002 was 205,000 tonnes while for the January-July 2002 period it was 1.43 million tonnes. For all of 2001, consumption was 2.61 million tonnes.

Futures Markets

Copper futures and options are traded on the London Metal Exchange (LME) and the COMEX Division of the New York Mercantile Exchange (NYMEX). Copper futures are traded on the Shanghai Futures Exchange.

Excerpted from the CRB Commodity Yearbook. For more information on CRB products click here

Related Links

Seasonal Chart