Copper - Will it take off? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Copper - Will it take off?

Dec 7, 2000

Copper prices, which slumped to $1,350 / MT in March '99, have run up significantly over the past 18 months. In September '00 copper prices touched a high of $ 2,000 / MT. The key copper consumption industries are telecommunication cables and housing (winding wires). These sectors have approximately a weightage of 34% and 28% in the growth of copper demand.

Sector Consumption Growth Cont. to
Cu growth
JFTC 30% 12% 3.6%
Power cables 8% 10% 0.8%
Winding Wires 25% 12% 3.0%
Transformers 10% 7% 0.7%
Transportation 5% 10% 0.5%
Process Industry 10% 8% 0.8%
Others 12% 10% 1.2%
Total 100% 11%

With strong demand from emerging markets the demand supply balance is expected to tilt towards a shortage. Such a scenario could help sustain buoyancy in prices.

Global demand / supply scenario
('000 tonnes) Production Consumption Gap
FY00 14,343 14,267 76
FY01 14,712 14,782 (70)
FY02 15,163 15,339 (176)
FY03 15,622 15,903 (281)
FY04 15,938 16,429 (491)

The new telecom policy (NTP '99) promulgated by the Government aims to increase the tele-density in the country to 15% by FY10 from the current levels of 2.7%. This is anticipated to increase the number of telephone lines to 150 m. The scorching growth could be the impetus for future growth in demand for copper. As demand for properties rises the housing sector is expected to boom. This will add to the demand of copper required for electrical wiring of the premises.

Consequently, the domestic markets are anticipated to register a robust demand for copper. The demand supply gap in domestic markets is expected to touch 110,000 MT by FY04. The global and domestic demand supply imbalances could cause copper prices to remain firm.

Resultant to the high growth in demand and firm copper prices, the treatment charges and refining charges (TC/RC) may continue to remain favourable, which is crucial to the refiners' fortunes. These charges rose by 20% in FY00, which boosted the refiners' bottomlines. Should demand conditions and price realisations materialise the smelters could witness a prolonged period of high growth.

Equitymaster requests your view! Post a comment on "Copper - Will it take off?". Click here!

  

More Views on News

5 Indian Companies Embracing Blockchain Technology (Views On News)

Nov 23, 2021

Blockchain adoption in India was slow in the past. Now, the technology is being well received.

CAREER POINT 2020-21 Annual Report Analysis (Annual Result Update)

Nov 22, 2021 | Updated on Nov 22, 2021

Here's an analysis of the annual report of CAREER POINT for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of CAREER POINT. Also includes updates on the valuation of CAREER POINT.

ANTONY WASTE HANDLING 2020-21 Annual Report Analysis (Annual Result Update)

Nov 22, 2021 | Updated on Nov 22, 2021

Here's an analysis of the annual report of ANTONY WASTE HANDLING for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of ANTONY WASTE HANDLING. Also includes updates on the valuation of ANTONY WASTE HANDLING.

Top Performing Sectors in 2021 (Views On News)

Aug 10, 2021

A look at this year's best performing sectors and what has helped them rally.

Nazara Technologies IPO: Should You Apply? (IPO)

Mar 17, 2021

Should you bet on this gaming company backed by ace investor Rakesh Jhunjhunwala?

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

MobiKwik IPO Opens for Subscription Soon. Key Things to Know Before Subscribing. (Views On News)

Nov 20, 2021

The Rs 19 bn issue is set to hit the market soon.

5 Indian Companies Embracing Blockchain Technology (Views On News)

Nov 23, 2021

Blockchain adoption in India was slow in the past. Now, the technology is being well received.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

5-YR ANALYSIS

COMPARE COMPANY

MARKET STATS