Mark Loveitt. ICSG Statistical Committee Lisbon 6 October 2015

Transcription

1 Refined Copper Demand in the EU Mark Loveitt President IWCC ICSG Statistical Committee Lisbon 6 October 2015

2 Legal Disclaimer The purpose of this presentation is to guide programs benefiting the copper industry and to provide attendees with information to make independent business decisions.

3 What is the IWCC The IWCC is the representative organisation for the semis fabricating industry worldwide

4 Where is the IWCC

5 What is the IWCC IWCC member companies & their subsidiaries each year use more than 70% of refined copper and copper scrap annually.

6 Europe in a Global Context

7 Refined Copper Demand 100% 80% 60% 40% 20% 0% F 2016F Europe Africa China Asia - Excl China Americas

8 Refined Copper Demand 100% 80% 60% 40% 20% 0% Europe s share of global copper demand has declined from 21.1% in 2012 to an estimated 18.3% in F 2016F Europe Africa China Asia - Excl China Americas

9 Refined Copper Demand 25,000 20,000 15,000 kt 10,000 5, F 2016F Europe Africa China Asia - Excl China Americas

10 Refined Copper Demand 25,000 20,000 kt 15,000 10,000 5,000 0 In tonnage terms the decline in Europe since 2012 has been less than 100kt, or less than 2%. However, over the same period global refined copper demand has increased by almost 13.5% F 2016F Europe Africa China Asia - Excl China Americas

11 Europe

12 Refined Copper Demand 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% F 2016F EU-28 Russia Other Europe

13 Refined Copper Demand 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% The share of total Europe refined copper demand accounted for by the EU-28 has risen from 72.9% in 2012 to an estimated 75.2% in 2016 This growth has been at the expense of Russia, whose share has declined from 15.5% in 2012 to an estimated 11.7% in F 2016F EU-28 Russia Other Europe

14 Refined Copper Demand kt 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, F 2016F EU-28 Russia Other Europe

15 Refined Copper Demand kt 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, EU-28 demand for refined copper is expected to: Increase by 1.4% in 2015 to 3.08Mt Little change expected for F 2016F EU-28 Russia Other Europe

16 What Makes the EU-28 Perform?

17 Refined copper (and scrap) is used for the production of semi- manufactures

18 What makes EU-28 Perform? 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, F 2016F Cu Semis Copper Alloy Semis

19 What makes EU-28 Perform? 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Refined copper is used mainly for the production of copper semis Scrap is used mainly for the production of copper alloy semis F 2016F Cu Semis Copper Alloy Semis

20 What makes EU-28 Perform? 3,500 Copper Semis Production kt 3,000 2,500 2,000 1,500 1, F 2016F Cu Wire Rod Cu Extrusions Cu Rolled Cu Tube

21 Wire Rod

22 Copper Wire Rod Production in the EU-28 in excess of 2.2 Mt Almost all is produced from refined copper Continued strong demand for wire & cable in Europe and in the export markets A life-saver for Greece, Italy & Spain Impact of changes in Russian export tariffs Easier to export cathode rather than wire rod from Russia Hence the decline in refined copper demand in Russia, most of which is used to produce wire rod

23 Copper Wire Rod Downside Risks Substitution by aluminium Main driver of substitution is price Slight easing of substitution pressure in 2015 due to lower commodity prices Nevertheless, cable makers need to be able to offer full portfolio of cable types using different materials (Cu, Al, fibre optic) as. Material choice often depends on the final enduser Aluminium wiring harness always a threat

24 Copper Semis

25 Mainly downside risks: Copper Semis Miniaturisation smaller and/or thinner components Benefit is the copper retains material market share But leads to reduced tonnage demand Slow down in demand from China in particular autos Trend to higher value added semis which are lower volume products Substitution limited threat as much substitution has already been done VW!!

26 Conclusion Limited scope for improvement in demand Low scrap availability (a function of price) supports refined copper demand Long-term trend probably a slow decline Structural changes should lead to improved productivity but no increase in refined copper demand

27 Thank you! Mark Loveitt President IWCC