Growth in global copper consumption may slow down

Global copper consumption growth could decline from 4.5 percent in 2014 to a minimum of 2.5 percent in 2015, Societe Generale notes in its monthly report.

In the latest report, Societe Generale predicts lower growth in global copper consumption in 2015, indicating an apparent slowdown in China and other emerging markets. As such, growth in global copper consumption could fall to 2.5 percent this year, compared with a 4.5 percent increase in the previous year.

The Societe Generale report says the risk of a slowdown in copper production has increased significantly this year. Unlike last year, when copper supply growth was fueled by the expansion of existing mines, this year's production growth is heavily dependent on the release of copper from new mines. The slowdown in economic growth in China and other developing countries is hampering significant expansion of new copper mines. As a result, global copper consumption is likely to fall significantly.

Copper mine output is expected to increase by 4.6 percent in 2015 and then by 2.6 percent in 2016, which could lead to higher levels of refined copper production in the coming years. Copper production this year is estimated to have fallen by nearly 650,000 tonnes in the first half, and supply disruptions could result in an annual production loss of approximately 1.15 million tonnes in 2015.

On the other hand, Chinese copper smelter capacities are planned to expand during the year. The consolidation of factories in the region, the introduction of the latest technologies in smelting processes will lead to a significant addition of capacities in the country by 2016.