PPC Forecasts 495,000T Global Copper Supply Shortage in 2011

Japan’s largest copper smelter, Pan Pacific Copper (PPC) forecasts global copper supply shortage is estimated to be 495,000 tonnes against the demand in 2011. The shortage would increase from 214,000 tonnes in 2010 when the demand growth in China and other emerging countries exceeds the global supply expansion. PPC forecasts the shortage would diminish to 31,000 tonnes in 2012. Copper supply is expected to increase by starts of new projects. Thus the supply and the demand could balance.

PPC estimates global copper consumption would increase by 3.1% to 19.986 million tonnes in 2011 from the previous year. The strong demand growth in China will push up the global copper consumption. In 2012, the world consumption is forecasted to increase by 3.8% to 20.74 million tonnes compared with 2011.

Copper ingot consumption in China is estimated to increase by 4.9% to 7.5 million tonnes in 2011 from 7.15 million tonnes in 2010, according to PPC’s original survey and Chinese market researcher’s report. The volume expansion is slowing down along the governmental tight money policy while the consumption keeps steady uptrend. PPC estimates the consumption would increase by 6% to 7.95 million tonnes in 2012 from 2011.

In Japan, domestic copper ingot demand increased by 1.1% for January-June 2011 compared with the corresponding period of 2010, according to the statistics by Ministry of Economy, Trade & Industry. The consumption is increasing for air conditioners. Moreover, copper consumers tended to bring their operations ahead of electricity regulations during this summer.

The domestic demand for copper ingot is likely to tone down in and after July. The demand decreases for July-September due to seasonal factor while the consumers would shift to consume their high material inventories. As total, PPC forecasts the annual ingot consumption would decrease by 3.9% to 1.02 million tonnes in 2011 from 2010. In 2012, the consumption is expected to increase by 2.9% year-on-year to 1.05 million tonnes.

As for the supply side, the global supply is estimated to increase by 1.7% to 19.491 million tonnes in 2011 from 2010. In 2012, the supply is forecasted to increase by 6.2% to 20.709 million tonnes from 2011 thanks to commercial starts of the new projects. China’s copper ingot production is forecasted to increase by 7% to 4.851 million tonnes in 2011 and increase by 13.1% to 5.487 million tonnes in 2012.