Global Copper Shortage Will Be Bigger Than Expected This Year
London, Nov. 23 (Bloomberg) -- A global copper shortage,
which will occur this year for the first time since 1995, will be
bigger than expected, as the world's economic growth boosts demand
for the metal, an industry group said.
The International Copper Study Group, a researcher set up by
governments of 24 copper producers and consumers, said copper
usage will exceed supply by 340,000 metric tons, almost quadruple
its June estimate.
``We have had a very good year for demand this year,'' said
Tony Warwick-Ching, a copper analyst at Commodities Research Unit
International. ``Demand will exceed supply next year again because
there's little major new (production) capacity coming on line.''
Economic growth in the U.S., the world's biggest consumer of
copper, drove the price of the metal used for wires and pipes in
houses to its highest in almost three years in September. Copper
prices have declined since then on concern that the cooling U.S.
economy wouldn't need as much metal next year.
Global copper usage will likely rise 6.4 percent to about
15.07 million tons this year, outpacing output, expected to grow
2.1 percent to 14.73 million tons, the Lisbon-based ICSG said.
Copper for three-month delivery was unchanged at $1,792 a ton
on the London Metal Exchange, after falling 0.7 percent yesterday,
close to its four-month low.
The price may start recovering in the second quarter of 2001,
as the persisting shortage of the metal becomes clear to
investors, Warwick-Ching said.
Copper inventories, as monitored by the LME, have dropped 58
percent since March 8. The inventories now stand at 355,755 tons,
the lowest level since September 1998
Next year, the deficit will likely narrow to 250,000 tons,
because demand growth will slow to 2.7 percent while production
will probably rise 3.5 percent, the ICSG said.
U.S. construction starts of new homes rose only 0.1 percent
last month. A decline in consumer optimism is expected to keep
housing construction from reaching another record this year. U.S.
new homes starts have remained little changed for the past four
months, after a 2.8 percent decline from June to July.
--Vladimir Todres in the London newsroom (44 20) 7673 2347, or at
vtodres@bloomberg.net/jxc |
