World copper demand to grow through 2000

World copper demand to grow through 2000

CHICAGO (Reuter): World refined copper consumption is expected to grow through 2000 based on continued industrial strength in the world's leading economies, independent base metals analyst Janice Jolly said.

Speaking to Reuters before her presentation to the Institute of Scrap Recycling Industries' annual copper roundtable here, Jolly said key copper consumers like the U.S., Europe, China, Thailand, Malaysia, Indonesia are expected to be in the forefront for the next three years.

"There is also some hope that South America will become a major copper consumer by year 2000," Jolly told Rueters in an interview before her presentation.

Over the long term, from 1997 through 2001, the growth rate of world refined copper consumption will be 3.2 percent on a yearly basis, she said.

She forecast this year's world refined copper consumption will be around 13.1 million tons, and will increase to 14.9 million tons by 2001.

World copper mining production, which is estimated to be 11.3 million tons in 1997, should expand to around 13.3 million tons by 2001, based on new and anticipated mine capacity, Jolly said.

She said there is "huge" mine capacity anticipated in Chile, Argentina, Indonesia, as well as other countries. And some of the new capacities have already started this year in Chile and Indonesia.

"The world supply-demand scenario for 1998 does not look that bad, with a only a little over one month's (supply in) inventories (or) about 1 million tons of refined copper on hand.

By 1999, however, world refined copper inventories may progress to 1.5 to 1.6 million tons and by 2000-2001, inventories may be well over two months supply, or two to three million tons," she said.

She stressed that her estimates were on the conservative side, based on lower world scrap recovery and lower mine capacity utilization from 1990 to 2001.

Regarding scrap, she noted that world scrap market will continue to suffer lower recovery rates, due to abundant primary supply anticipated through 2001.