In 2022, the non-ferrous metal market has ups and downs. On the one hand, due to geopolitics, the Russia-Ukraine conflict and the European energy crisis and other multiple factors superimposed, brought a chain reaction to the non-ferrous metal market; On the other hand, the rise of the new energy industry and the energy transformation brought about by the "double carbon" goal have a significant impact on the non-ferrous metal industry. In 2022, despite the high and volatile trend of non-ferrous metal prices and the increase in energy costs, the fundamentals of copper are generally good, global copper production, consumption and trade have maintained a stable growth trend, and China has become a "stabilizer" for the global copper industry to maintain growth.
Review of global copper and refined copper production consumption and trade
Copper and refined copper production
In terms of production, in 2022, global copper mine production (metal volume) was 21.922 million tons, an increase of 3.0%. The output of fine copper was 25.641 million tons, up 2.8% year-on-year (see Table 1).
Chile, the country with the world's largest copper reserves, is far ahead despite a decline in mine production over the past five years. In 2022, Chile's copper production will account for 24.3% of global production. At the same time, the concentration of global copper production is high, there are five countries with annual copper production of more than 1 million tons, and their total output reaches 13.254 million tons, accounting for 60.5% of global copper production. In recent years, the Congo (Gold) copper mine production has grown rapidly, copper mine production in 2018 was 1.242 million tons, in 2022 has reached 2.295 million tons. This is mainly due to investment by Chinese companies, and Congo's copper production is set to grow further.
At present, as the world's largest producer of refined copper, China's output growth has slowed down in recent years, but it still maintains stable growth (see Table 2). In 2022, China's refined copper production reached 11.062 million tons, an increase of 5.7% year-on-year, accounting for 43.1% of the world's total. The remaining top 12 countries together produced 11.015 million tons of refined copper, the same as China's output. In the past few years, Congo's production of refined copper (mainly wet copper) has grown rapidly. This is also due to investment by Chinese companies, similar to copper production. In the next few years, Congo (gold) fine copper production will continue to maintain rapid growth.
Global refined copper consumption
From the perspective of refined copper consumption, China has become the world's largest consumer of refined copper for many consecutive years. Even though affected by epidemic factors, the consumption of refined copper still maintained a rapid growth rate (see Table 3). In 2022, China's apparent consumption of refined copper was 14.684 million tons, an increase of 5.9% year-on-year, accounting for 56.3% of global refined copper consumption. In the same period, the consumption of refined copper in many countries has declined, but the increase in consumption in China has not only offset the reduction in these countries, but also become the main force driving the growth of global refined copper consumption.
Global copper concentrate and refined copper trade
Affected by the distribution of copper resources and industrial layout, copper raw material trade is the main way of global copper consumption rebalancing. From the perspective of copper raw material trade, China is the world's largest importer of copper raw materials.
Although China is one of the world's major copper producers, but relative to copper consumption, China's domestic copper raw material supply is far from enough to meet demand. Therefore, China needs to import a large number of copper raw materials every year, mainly including copper concentrate, crude copper, refined copper and waste copper 4 kinds. Because the import volume of crude copper and scrap copper is relatively small, it will not be detailed here.
From the perspective of the global copper concentrate import countries and regions, China imports the largest amount of copper concentrate. In 2022, China's import volume reached 25.318,000 tons (about 7.09 million tons of copper metal), an increase of 8.1%, accounting for 61.1% of global imports. This was followed by Japan and South Korea, but these two countries import small amounts of copper concentrate compared with China and have no copper production at home. In addition, in recent years, China's Taiwan, Malaysia and South Korea and other copper concentrate imports have grown rapidly, at the same time, a large number or all exports, and the former two do not have copper smelting production enterprises, the reason is self-evident to the industry.
In terms of copper concentrate exports, Chile is still in first place in the world, but its share has declined relative to previous years, mainly due to the continued growth of copper concentrate exports from Peru and rapid increases in exports from Serbia, Indonesia and Kazakhstan.
In terms of trade in refined copper, China still occupies the first place in the world's refined copper importers. In 2022, China's refined copper imports reached 3.885 million tons, accounting for 40.8% of global imports. In addition, the United States, Italy and Germany import more than 600,000 tons, China's Taiwan imports despite a slight year-on-year decline, but still ranked fifth in the world's importing countries and regions.
In terms of refined copper exports, Chile is still the world's largest exporter of refined copper, in 2022, the country's exports of 1.933 million tons, down 13.0% year-on-year, accounting for 21.0% of the global total exports of refined copper; Congo (DRC) exports reached 1.237 million tons, an increase of 20.2%, accounting for 13.4% of the global share. As early as 2018, Chile's exports of refined copper reached 2.38 million tons, accounting for 27.0% of the total global exports of refined copper, while the Congo (Gold) basically no refined copper exports, the export volume of the two countries "a drop a liter" situation, to some extent reflects the changes in the global supply pattern of refined copper, and these changes will continue to evolve.
Global copper supply and demand outlook for 2023-2024
In late April 2023, the International Copper Study Group (ICSG) held its annual meeting in Lisbon, Portugal, and made the latest forecast for global copper and refined copper production and consumption in 2023-2024. In 2023, the global copper supply and demand balance is a shortage of 114,000 tons, and in 2024, a surplus of 297,000 tons (see Table 8).
Through further analysis, it can be seen that in 2023, the fastest growing regions of global copper production are Latin America and Africa, which are expected to increase by 8.7% and 7.7% respectively. The increase in refined copper production is mainly concentrated in Asia (excluding ASEAN and CIS countries) and Africa, which are expected to increase by 3.6% and 5.9% year-on-year, respectively. Asia is not growing as fast as Africa, but because of its large base, the increase is also large. The main contribution of copper consumption growth is from Asia (excluding ASEAN and CIS countries), although the year-on-year growth is expected to be only 1.2%, again, because of the large base, so the increase is large. The situation in 2024 is broadly similar to that in 2023, with faster increases in copper supply in Africa, the Americas, Asia and the rest of Europe except the EU; The fastest growing areas of refined copper supply are mainly Africa, Latin America and Asia (excluding ASEAN and CIS countries); The main contribution to the growth in refined copper consumption came from Asia.
For refined copper consumption, some experts and institutions believe that in the medium and long term, India will be the main driving force for global refined copper growth. The author believes that this still needs a long way to go, as can be seen from Table 3, in 2022, India's refined copper consumption is only 475,000 tons, which is comparable to China's refined copper consumption in the early 1980s. It can be seen that if India wants to become the main driving force of global copper consumption and occupy half of the country, it has a long way to go. Even if China's refined copper consumption no longer grows and maintains its current level, it is still an indispensable and important force in the global copper market. In addition, for refined copper consumption, driven by energy transformation and "dual carbon" goals, we are still optimistic about the future copper market.
