After a shortfall of some 436,000 tons of copper last year, investors are bullish on the red metal in 2011. But just how much copper does the world consume? The short answer is roughly 20 million tons a year according to the World Bureau of Metal Statistics.
Global demand for copper grew by 8 percent during the first nine months of 2010 (per Reuters), and that’s got some investors calling for copper to rise above $11,000 per ton this year.
Estimates for global copper shortfalls in the coming years range from 380,000 tons to 500,000 tonnes in 2011 and Standard Bank predicts a deficit of 562,000 tonnes in 2012, according to Business-standard.com.
Investor demand from physical copper ETFs could add even more pressure to an already strained market. That’s good news for investors and miners, but it could also drive up commodity prices in the midst of a fragile economic recovery.
Still, the ingredients seem ripe for a bubble in copper prices. There’s growing demand, looming inflation, a projected shortfall in supply and the emergence of physical copper ETFs. It’ll be interesting to see if those factors have the red metal shining brighter than its flashier cousins this year.
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Tags: copper, copper mining
