COP­PER

Dalal Street Investment Journal - - SPECIAL REPORT -

Ac­cord­ing to a Care Rat­ings re­port, cop­per has turned into a note­wor­thy in­dus­trial metal, po­si­tion­ing it­self third af­ter iron and alu­minium in terms of quan­ti­ties con­sumed. Com­pared with the global mar­kets, In­dia has re­stricted cop­per ore stores con­sti­tut­ing around 2 per cent of the world cop­per re­serves. In­dia re­mains at num­ber seven as im­porter of cop­per, adding up to $3.3 bil­lion in the world list as per the im­ports for the year 2016. The global mined cop­per pro­duc­tion in­creased at a

CAGR of 4.9% be­tween CY12 to CY16. Cop­per pro­duc­tion grew 5.6 per cent YOY in CY 16 com­pared with 3.8 per cent in CY15 and 1.4 per cent in CY14. World mine pro­duc­tion of cop­per is es­ti­mated to have de­clined by around 3.5 per cent in the first quar­ter of 2017, due to a de­cline in pro­duc­tion in Chile. De­mand from China, the world’s top con­sumer, is one of the ma­jor fac­tors that drive the cop­per mar­ket. Cop­per costs saw a de­cline from FY2014-15 on­wards due to de­cline and log­jam in the Chi­nese econ­omy. In FY2017-18, prices of cop­per have risen above the FY2016-17 level as both Chi­nese and US economies showed signs of pos­i­tive out­look. More­over, prices held firm af­ter an earth­quake in the main cop­per pro­duc­ing re­gion of Chile sup­ported the up­side in the cop­per prices. Chile’s Pres­i­dent Michelle Bachelet said her ad­min­is­tra­tion is set to achieve what no other gov­ern­ment has man­aged to do for half a cen­tury to re­duce the na­tion’s de­pen­dence on cop­per and di­ver­sify the econ­omy.

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