Note: The primary reason for translating this article is that it includes a striking “Distribution Map of Winners and Losers in the Copper World,” which prominently highlights China. It’s highly worthwhile for China’s leading copper companies to ponder carefully just what kind of position China should occupy on the global copper map.

●    The cost curve is declining.

●    Maintain marginal cost

●    Supply surplus persists.

●    Copper prices have fallen. 20%

    Highly regarded GFMS The latest annual copper mine report forecasts that, despite a slowdown in growth rates, copper mine production will continue to rise over the next three years—driven by the gradual commissioning of copper mines that were invested in during the previous economic boom.

    2015 Year, the global copper mine production growth rate was 3.5% , meaning copper production has increased. 652000 tons, global mineral copper reaches 1900 Ten thousand tons, and 2014 Annual growth rate is 2.1% , but significantly lower than 2013 Year 8.2% the growth rate. Peru is in 2015 Annual copper production increased. 28% Its output ranks third globally, surpassing that of the United States but trailing only Chile and China.

     A well-known trend is unfolding: on the one hand, copper mine performance is declining, and an increasing number of problems are being linked to world-class copper mines. Interestingly, globally there are indeed... 722000 The increase in copper production from existing capacity exceeded the combined total of new production from mine expansions, new mines, and the resumption of operations at old mines.

According to Thomson Reuters GFMS Research shows that, in the face of falling prices, it’s very difficult for mines to reduce costs. 2015 The estimated global cash cost of copper mining for the year is: 3586 U.S. dollar / ton (1.62 U.S. dollar / Pound ) , down compared to the same period last year. 4% (Reduction per ton) 160 US dollars). However, the total cost of global copper mines ( The cost level required to maintain the mine's full-capacity, normal production. ) For 4626 U.S. dollar / ton (2.10 U.S. dollar / Pound ) , and 2014 Compared to the annual level, it decreased only by 2%。

     The decline in mining costs has already become difficult to offset the sharp drop in mining revenues. 2015 The average annual copper price is 5503 U.S. dollar / ton ( 2.50 U.S. dollar / pounds), while the copper price last Tuesday was 4718 U.S. dollar / ton ( 2.14 U.S. dollar / pounds). This indicates that the average total cost of global copper mines is painfully approaching the market price of copper.

Despite such great pressure, GFMS It is estimated that last year, only... 200000 Tons of copper mining capacity have been phased out, most of which belonged to Glencore in the Democratic Republic of the Congo. ( Gold ) The shutdown of the Katanga copper mine and the Mopani copper mine in Zambia. (GFMS It was also pointed out that these mines will be reactivated next year after undergoing expansion and upgrades. )。

GFMS It was noted that one explanation is that the paper-thin profit margins have little impact on output because, in the third quarter of last year, copper prices had merely fallen below the average price. 0.9 Twice.

     The study further points out that, regarding the closure of production capacity in the coming years, researchers caution that “the scale of any new mine closures should not be exaggerated.”

     First, the weakness in crude oil prices is putting downward pressure on inflation, while weak inflation expectations and a strong U.S. dollar could potentially push down copper’s cost curve over the next three years. Moreover, the costs associated with closing copper mines—including layoffs, environmental compliance obligations, and potential deterioration of relations with governments—will ultimately lead to mine closures as these impacts accumulate on companies.

     The growth in primary product supply will transition to the output of more advanced refined products. It is estimated that copper consumption growth over the next three years will remain at an average level. 2.1% Level. It is estimated that copper smelting capacity increased last year. 400000 ton / Year, GFMS More new smelting capacity is expected to enter the market this year.

     The world of copper still belongs to China. According to forecasts, 2018 China's copper consumption will account for an increasing share of the global total. 46% , slightly higher than 2015 of the year 45.5% However, China’s copper consumption growth rate will slow down to an average of per year. 3.2% 。

     According to this study, slowing demand growth combined with strong supply will lead to an oversupply in the market and steer it toward the end of a cycle. Following last year’s copper supply surplus, 363000 Tons (this is the largest surplus quantity in years), GFMS Expected 2016 The copper market supply will have... 150000 Tons of surplus, 2017 The year will also see the same supply surplus. Only by boosting demand growth can we offset the overproduction from copper mines and smelters.

     Based on this imbalanced situation, GFMS The market price of copper is expected to... 2016 This marks the fifth consecutive year of decline. Researchers predict that, as the global economy recovers, copper prices will... 2017 Starting to rebound, with year-on-year growth. 5% , to reach 5100 U.S. dollar / ton ( Per pound 2.31 U.S. dollar / Pound ) As market oversupply decreases, GFMS To think that 2018 Copper prices accelerate their rise. 12.5% , to reach 5738 U.S. dollar / ton (2.44 U.S. dollar / Pound ) However, after adjusting for price factors. (2015 Copper price ) under the circumstances, GFMS Expected 2016 The annual copper price will still be lower than... 5000 U.S. dollar / tons—researchers believe that it will take until... 2018 It will take a year before we see a positive shift in the market.

     Please note that with 2014 About the year 4% Compared to the growth in [something], the growth in copper demand will consistently remain lower. 3% “The duration of the copper market surplus could well exceed the remaining three years of the roughly ten-year cycle we’ve been forecasting.” Even so, there’s no doubt that the current low-price environment is sowing the seeds for the next boom—namely, the shelving, delay, sale, or outright abandonment of copper mining projects.

(Translated by Wang Sidede)

Original text: The copper miners' game of chicken continues.

Frik Els | Apr. 5, 2016, 5:04 PM http://mining.com/

Lowering of the cost curve ， Marginal mines staying open at all costs will see oversupply persist and a fifth year of copper price declines.

The latest edition of the closely followed GFMS Annual Copper Survey forecasts primary production to continue to grow over the next three years. ， albeit at a slower pace than in the recent past ， as miners deliver on investments made during the boom years.

World mine production increased by 3.5% or 652. ， 000 tonnes in 2015 to just over 19 million tonnes ， compared with a 2.1% increase in 2014 ， but down substantially from 2013's 8.2% clip. Peru led the pack with a 28% rise in production which saw it surpass the US in the global rankings to take third place behind Chile and China.

Given the well-publicized trend of falling grades and increasingly contaminated concentrate at the world's biggest mines, it's interesting to note that a full 722 ， The 000 tonnes of increased production came from higher yields. ， more than the additional supply from expansions ， new mines and restarts combined.

According to the Thomson Reuters GFMS study, copper miners had a hard time driving costs down amid the falling price environment. Net cash costs for full year 2015 stood at an estimated $3. ， 586 per tonne ($1.62 per pound) ， a modest 4% or $160 per tonne decline year-on-year. However, ， total costs (a better proxy for sustaining production levels at mines) for the sector at $4 ， 626 per tonne ($2.10 per pound) were only lower by a paltry 2% from levels in 2014.

While costs proved difficult to curb, revenues declined steeply, with the average copper price achieved in 2015 at $5. ， 503 or $2.50 per pound. Average total costs at the world's copper mines are also painfully close to the ruling price, which on Tuesday was $2.14 or $4. ， 718 per tonne.