Resource World Magazine

J U N E / J U L Y 2 0 1 8 www.resourceworld.com 25 W hile there has been some volatility in copper prices, since late March 2018, copper has been steadily in an upward trend – selling for about US $3.11/lb as of late May. Actually, the low was in late April 2017 at about US $2.50/lb which then saw the price ratchet up and down over the coming months. The price of copper is affected by a number of circumstances: supply and demand, as well as mine openings, clo- sures and disruptions. For example, strikes at Chile's Escondida Mine, the largest copper mine in the world, and Freeport- McMoRan's Grasberg Mine in Indonesia reduced global copper output by an esti- mated 5-7% according to a report by the Investor News Network. Copper is a bellwether metal that reflects how well industry or a country in general is doing as the red metal is used by both industry and jurisdictions building infra- structure. Looking at the near-term future, Thomson Reuters GFMS said it expects Chinese consumption to increase but at a slower pace that last year. Reuters has reported that solid China import figures have bolstered optimism over the health of demand from the world's biggest metals user. IHS Markit [INFO-NASDAQ], a con - sultancy in critical information, analytics and expertise, has forecast that global cop- per consumption growth will accelerate to around 3.0% in 2018 and 2019, on a par with its 30-year average of 2.9%. IHS is of the view that US consumption growth does see a boost, rising to 2.3% in 2018. This breaks the long-term decline in con- sumption dating back to 2000, but is also temporary. Global copper production is over 20 million tonnes annually with 2017 produc- tion declining 2% in 2017. Since 1950, the world has had about 40 years of copper reserves and significantly greater copper resources, according to the International Copper Study Group. One aspect of the copper sector that is gradually unfolding is the copper demand that is being generated by the birth of the electric vehicle industry. This has been slow to unfold but is speeding up and will generate a new and huge demand in the next few years. According to EVWorld, a recent report from the Edison Electric Institute and the Institute for Electric Innovation (EEI/IEI) predicts that the number of plug-in elec - tric vehicles (PEV) on US roads will reach 7 million by 2025, up from 567,000 today. Annual PEV sales are expected to grow from 0.9% of total vehicle sales in 2016 to 7.3% in 2025. EVWorld notes that while conven - tional cars use 18-49 pounds of copper, hybrid electric vehicles (HEV) contain approximately 85 pounds, plug-in hybrid electric vehicles (PHEV) use 132 pounds, battery electric vehicles (BEVs) contain 183 pounds, a hybrid electric bus con- tains 196 pounds, and a battery electric bus contains 814 pounds, most of which is used in the battery. There is somewhat of a discon- nect between the general events and circumstances that determine the price of copper and the copper discoveries made by exploration and mining companies – although in a bullish scenario of strong demand with a possible deficit, shares of copper discoverers do even better than at other times. n COPPER Copper prices on steady rise; EVs to spur demand * Resource World does not sell your information to third parties #604-700 W Pender St., Vancouver BC V6C 1G8 Canada online at www.resourceworld.com or phone 1.877.484.3800 SAVE 50% up to Resource World (Print and Digital Edition) 1 Year/6 issues (CAD $24.95) Resource World (Digital Edition) 1 Year/6 issues (CAD $12.95) Resource World International (outside Canada and USA (Print and Digital Edition) 1 Year/6 issues (CAD $99.95) NAME ADDRESS TEL EMAIL

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