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  • BME's Latest Presentation
  • Scotia Capital Commodities Conference - The collapse in copper consumption: How long? How deep? Will the copper industry be ready for recovery? - Click Here
  • February 4th, 2009 - Copper surplus of one million tonnes over Q4 2008 - Q3 2009 looks likely
  • BME’s current assessment is that for the twelve months from October 2008 through September 2009, in copper there will be an excess of refined production over refined consumption of around one million tonnes. Between end- December 2009 and end-January 2009, LME stocks of copper increased by 150 kt, or almost 45%, from around 340 kt to 490 kt. Mostly, we believe this to be a simple reflection of a huge current surplus. However, there was undoubtedly also some relocation of stock, as financing off-warrant stocks became more difficult. The relocated element of the LME stock build represents unsold producer and merchant material that began building up on a big scale as long ago as August in Zambia and September in Chile.
    LME cash prices fell below $3,000 per tonne in the second half of December 2008, but have recovered to a little over $3,000 per tonne in January despite the huge LME stock build that month. As the chart on the back page shows, the LME stock to LME cash price curve has turned almost horizontal now, as it does tend to do once prices have fallen into the mine cost structure. Even the very modest partial price recovery that has taken place is puzzling if one tries to interpret it simply in old-fashioned ways, i.e. according to surplus or deficit. But in the short term, today’s commodity prices are driven much more directly by other markets and by sentiment. Copper prices have been responding to the new US administration’s approach to stimulus packages, and also to the evidence that the Chinese stimulus packages are now beginning to show promise.
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  • "Link between forecast mine production costs and forecast copper prices"
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  • Latest from the Quarterly Report on Copper
  • Refined copper consumption reduced due to global economic weakness and higher oil prices.
    June 30th 2008 - When we last reported, in the first quarter, we were assuming a relatively mild deceleration in economic growth in the first half of 2008 but, from a global perspective, still a fairly robust rate of growth. We were then expecting global industrial production (IP) growth to slow from 6% per annum in both 2006 and 2007 only to around 5% per annum in both 2008 and 2009. We were then expecting the next global, once-per decade recession to occur in 2010, with a period of negative year-on-year IP growth. We then expected IP growth to recover to 4% in 2011 and 6% in 2012.
    Then in April, we underwent a major change of view on the macroeconomic front, advancing our assumed roughly once per decade recession from 2010 to late 2008-early 2009. We saw this spreading from North America and Japan in late 2008, to Europe and some other Asian countries in early 2009.
    In May and June, the issue of stagflation (stagnation in economic growth combined with inflation) began to appear more and more in the headlines. High oil and food prices have raised inflation rates generally and, in Europe at least, have increased the likelihood that the next shift in interest rates will be upwards. If the USA and other countries follow suit, the risk is a widespread and potentially deep recession. As CHR Metals says in the June issue of its Global IP Watch, “Central banks may wish to cut interest rates in order to stimulate demand but, instead, are being forced to hold rates steady, or even increase them, as inflation returns as a major scourge. While there may be a debate about the justification for oil prices threatening to break above $150/bbl, there is little doubt about the negative impact on growth prospects and inevitably on demand for oil products.”
  • Latest Presentations
  • Scotia Capital Commodities Conference - The collapse in copper consumption: How long? How deep? Will the copper industry be ready for recovery? - Click Here
  • Deutsche Bank - BRICs conference, London, November 2008 - PDF
  • Minexpo - Las Vegas, September 2008 - PDF
  • Metal Bulletin's 21st Copper Conference - Bulgaria, June 2008 - PDF
  • International Copper Study Group Meeting - Lisbon, April 2008 - PDF
  • IQPC Commodities Conference - New York, April 2008 - PDF
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