Asia is the key driver of global refined copper usage, especially from China, Japan, Korea and India where demand has expanded almost eight-fold over the past four decades.
Hareesh V
After posting a loss of 12 percent in 2018, copper started the year with straight three weeks of gains. Optimism that the US and China are close to resolve their enduring trade dispute spurred expectations that demand for base metals from the world’s top base metal consumer, China may improve. Supply disruptions in world’s largest producer, Chile too supported the short-term fundamentals.
Prospect of feeble Chinese demand and moderate global economic growth outlook had an impact on copper prices in 2018. Trade dispute between the US and China and a strong dollar weighed on the sentiments. In the benchmark LME, prices nosedived from a six-and-a-half year high of USD 2685 a tonne to two-year low of USD 1876 by end of last year. Indian futures prices too followed suit.
At the same time, global copper market was in a deficit last year. As per International Copper Study Group’s bulletin, in the first ten months of 2018 world copper market was at a deficit of 5.47 lakhs tonnes compared with 2.24 lakhs tonnes of deficit same period previous year. Though global supply was almost steady, overall growth was partially offset by weak output from Canada, US and India.
