The copper market has never looked in better shape

John Robertson

PortfolioDirect

The copper market has never looked in better shape. That's one possible inference from a chart of changes in copper usage over the last five decades. The most recent data from the International Copper Study Group suggest 2014 usage will have grown by the most tonnes ever in a single year. According to the ICSG, usage in the first 11 months was 1.9 million tonnes or 9.8% higher than over the corresponding period in 2013. How accurately Chinese use can be measured is an important consideration. Even so, from this point, only slight adjustments to either demand or supply could force a large deficit. At the rate at which the market has been growing over the long term - 3.4% p.a. - nearly one million tonnes of additional refined copper will be required annually. The industry has been able to increase refined output this much i only four times before 2014 and, then, only after earlier production losses. Anything much above average growth seems beyond the capacity of the industry to cope.


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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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