Copper’s value has withstood even a global recession.
Copper pricing has its ups and downs, but the red metal has largely stayed at the upper range of its historic value no matter what sort of economic statistics are disclosed.
At the session on copper at the Middle East Metals Recycling Conference, held in March in Dubai, speakers noted that some investment dollars have been put into copper, but a number of supply and demand reasons also back up the red metal’s red hot status.
Michael Lion, chairman and director of Sims Metal Management Asia Ltd., Hong Kong, told conference attendees several factors are causing copper to be considered “the new gold.”
On the demand side, as several Asian nations have experienced strong, steady economic growth, “demand for copper has grown far faster than for other materials,” Lion said.
As the developing world craves more copper, recyclers of copper and brass scrap grades have played important roles in feeding that craving.
Some 40 percent of the world’s copper is made of recycled metal, according to Mir Mujtaba, director of Dubai-based Mir Metals Trading LLC, who also spoke at the conference’s “The Quest for Copper” session.
Mujtaba paid special attention to the Gulf Cooperation Council (GCC) region and its ability to collect and export copper and brass scrap to other parts of the world.
Some 16,000 tons per month of copper and brass scrap are generated in the eight-nation GCC region, according to Mujtaba’s estimate, with very few destinations to melt that scrap within the GCC.
Half of the generated total occurs in the United Arab Emirates (UAE), with generation “increasing day-to-day,” Mujtaba said. The booming construction sector yields much of that scrap, with wire and cable, tubing and pipe being common types of scrap.
Also speaking at the conference’s copper session, Wu Yan of the China Nonferrous Metals Industry Association Recycling Metals Branch (CMRA), affirmed that China’s secondary copper production industry “relies on imports.”
Chinese recyclers, brass mills and copper refiners import as much as 4 million tons of copper-bearing scrap each year. Wu said she foresees the construction, power, transportation and consumer electronics industries in China continuing to require copper (and thus imported copper scrap) for many years to come.
China’s federal government, she said, is supportive of the secondary copper industry and has earmarked funds in its 12th five-year plan to improve technology at copper smelting and refining plants as well as at the scrap facilities that help prepare the feedstock for this sector.
“Technological development is very important,” said Wu, for environmental reasons and because labor costs are rising, making improved automation worthwhile. “It is a big challenge for some traditional recycling companies,” Wu said of labor costs. “They must [invest] to change their method of processing.”
While the demand for copper escalates, the world’s copper mining companies strain to keep up with this demand. “There is usually not enough of it,” Lion said of global mined copper output.
Producers are very cognizant of avoiding overcapacity, he added, and even when striving to provide more copper, “production never seems to meet its targets,” Lion said.
The Middle East Metals Recycling Conference, co-hosted by the Recycling Today Media Group and Waste & Recycling Middle East magazine, was March 5-7 at the Hyatt Regency Dubai.