Copper end use trends

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According to data released by the Shanghai-based nonferrous metals data provider Metalease, 18 major copper tube makers in China were operating at 35% capacity in January, in response to plummeting demand. Business activity has also been affected by the Chinese New Year festivities. The plants, which have a combined capacity of 978,000 t per year, consumed 28,000 t of refined copper in January compared to their consumption capacity of 81,500 t per month. Even though the Chinese government has increased the export tax rebate for copper tubes of diameter of less than 25 mm, the 18 copper tube producers exported only 21% of their total output in January, compared with 26% in December.

It is clear that the economic and financial downturn have begun to take a serious toll on new wind development.

The Anglo-Dutch steel producer, which this week announced the elimination of 2,500 jobs at its UK plants, says the surge in British electricity prices from £24 a megawatt hour to £75 MWh over the past five years has been greater than "virtually anywhere else in Europe". If that is so, Britain's liberalised energy market is serving its users ill.

There's been chatter here and there about how much recoverable lithium there is in the world, and whether our move toward electric vehicles powered by lithium-ion batteries will create a "peak lithium" scenario.

The mismatch between government enthusiasm and investor sentiment might seem strange. After all, more than almost any other business, renewable energy relies on taxpayer support.

GloboTrends is happy :-)

Aluminium and nickel are expected to struggle under the weight of high inventories, and even when a recovery finally kicks in, perhaps later this year, prices will be slower to pick up than other industrial metals. Faced with the bleak prospects of a sharp global economic downturn, producers and downstream users of these two metals may be keener than most to consolidate to try to ride out the storm.

As the global downturn bites, just what do you do as a manufacturer when consumers stop buying your products?

Although volatility in most assets is sharply lower than it was in November, oil price volatility has continued to climb. This rise in volatility, and resulting near $30-a-barrel oil price, is reflecting the same imbalances in the energy market that $147 oil did last summer: namely inadequate investment in basic infrastructure to produce, deliver, store and distribute energy. Last summer, attention focused on shortages in production capacity. However, present underlying shortages in storage and transportation are creating massive price distortions across the energy complex. Storage and transportation capacity provides the system with a buffer to supply-and-demand shocks by allowing it to run surpluses and deficits that smooth the normal cyclical swings in prices. As global storage capacity has failed to keep pace with growth in global demand over the past three decades, this buffer has shrunk relative to the size of the market, resulting in chronically higher than normal price volatility. Once infrastructure begins to constrain the ability of the market to run imbalances, prices have to create more of the adjustment process. Electricity markets are an extreme case of this. As power cannot be stored, supply must always equal demand, leaving price as the only mechanism to force the adjustment process. Accordingly, electricity is the most volatile of all assets. Due to inadequate infrastructure investment over the past several decades, oil is looking more like the electricity markets.

MOSCOW, January 21 (RIA Novosti) - Russia's prime minister signed on Wednesday a resolution to completely eliminate plain nickel and cathode copper export duties, but kept 10% duties in place for refined copper and copper alloys, a government spokesman said.

SYDNEY, Australia (AP) - Mining giant BHP Billiton announced plans Wednesday to slash 6,000 jobs, or about 6 percent of its global work force, as it rushes to cope with plummeting demand because of the global financial crisis.

CESCO Executive Director Juan Carlos Guajardo told Reuters in an interview that he saw copper output coming in at about 5.3 million tonnes this year, either unchanged from a year earlier or down as much as 1 percent.

Capacity is dividing China's metals producers, with the country's top copper refiner looking for an upturn in a balanced market and the leading aluminium firm hoping things will not get worse.

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According to the United States International Trade Commission, US copper imports in November rose by 2.5% m-o-m to 50,992 tonnes, compared with 49,737 tonnes in October. The rise in the imported quantity of copper is not attributed to an increase in physical demand for the red metal, but to the narrowing Comex-LME arbitrage ratio that favoured imports. The physical demand for copper is suffering from ongoing weakness due to the downturn in the US construction, manufacturing and automotive industries. As a result, in the first 11 months of 2008 US copper imports have contracted by 14.2% to 661,918 tonnes, compared to 771,125 tonnes in the same period of 2007.

Hubdub review

Global copper demand probably won't see much of a recovery until 2011 because of lower global GDP forecasts, a marked slowdown in China's consumption growth and modest supply in the near term, Credit Suisse said in a note Thursday.