Japan's Pan Pacific sees global copper shortage shrinking in 2020
2019-09-23 10:32:02 [Print]
Pan Pacific Copper (PPC), Japan's top copper smelter, expects a global shortage in copper to be less acute next year as top consumer China's output increases and its demand growth softens amid the prolonged U.S.-Sino trade row, a company official said.
PPC, which is also a miner and is controlled by JXTG Holdings, projects the global consumption and supply of refined copper to climb by 1.5% and 1.7% respectively in 2020 compared with this year, Naoki Kojima, PPC's general manager for marketing said on September 20.
"China's demand will continue to grow next year, but at a slower pace than this year and than we had expected last year," he said, citing weaker industrial demand for the metal, widely used in power and construction. "Still, Beijing's economic stimulus, such as hefty spending in infrastructure and deregulation to bolster car purchases, will support metal demand," he added.
China's new smelting capacity, meanwhile, will help bolster global output, but the shutdown of the Indian company Vedanta's smelter and tighter concentrate supply will limit the gain, he said, forecasting a shortage of 38,000 tonnes worldwide in 2020, compared with 89,000 tonnes this year.
Kojima expects its term premiums to China next year to come near this year's $86 a tonne. The world's top copper producer, Codelco, set its 2019 term premiums to China at $88 a tonne.
"Since the spot premium market was weaker early this year, we expect tough negotiations ahead," he said. "But with a boost from China's stimulus in mind, we want to negotiate in a range near the current level for 2020."
PPC, which is also a miner and is controlled by JXTG Holdings, projects the global consumption and supply of refined copper to climb by 1.5% and 1.7% respectively in 2020 compared with this year, Naoki Kojima, PPC's general manager for marketing said on September 20.
"China's demand will continue to grow next year, but at a slower pace than this year and than we had expected last year," he said, citing weaker industrial demand for the metal, widely used in power and construction. "Still, Beijing's economic stimulus, such as hefty spending in infrastructure and deregulation to bolster car purchases, will support metal demand," he added.
China's new smelting capacity, meanwhile, will help bolster global output, but the shutdown of the Indian company Vedanta's smelter and tighter concentrate supply will limit the gain, he said, forecasting a shortage of 38,000 tonnes worldwide in 2020, compared with 89,000 tonnes this year.
Kojima expects its term premiums to China next year to come near this year's $86 a tonne. The world's top copper producer, Codelco, set its 2019 term premiums to China at $88 a tonne.
"Since the spot premium market was weaker early this year, we expect tough negotiations ahead," he said. "But with a boost from China's stimulus in mind, we want to negotiate in a range near the current level for 2020."
Copper Conc. TC 25%min CIF China
Unit:USD/mt
China copper concentrate producers' output statistics by province by month
Unit: mt
