news briefing
Chile, the largest copper producer in the world, announced on September 14 that the estimated annual average copper price will be adjusted to US$4.2 per pound (approximately US$9,260/metric ton). Since the production capacity on the market has gradually exceeded demand, the average price is expected to further decline to US$3.95 next year (approximately US$8,710/metric ton) - a drop of nearly 6%.
impact analysis
According to the latest report by Chilean Copper Commission (Cochilco), the supply gap of 153,000 tons of copper should remain this way until the end of the year. However, it is forecast that copper prices be lowered to U$4.20 due to the slowing of demand in mainland China and the expected impact of stimulus measures recalls by the US Federal Reserve. Furthermore, it is estimated that a regular supply will be gradually restored after 2022, thus causing the copper market to have a supply excess next year.
To contain the epidemic, blockade and restriction measures implemented by various countries have continued to disrupt copper mine production. Meanwhile, countries around the world are vigorously promoting carbon reduction measures, triggering demands for electric vehicles, wind and solar power generation, and various other needs. However, these industries would need to use a lot more copper than traditional industries. In view of such an imbalance between supply and demand, this has further pushed copper prices up. Hence, the price of copper this year has soared to the highest yet at US$10,449 per metric ton. So far, it has risen by 37.3% compared with the same period last year and should remain on the high end still. Actually, it is not the shortage of chips that most impacts Taiwan’s PCB industry but rather soaring copper raw material has accounted for the highest proportion of PCB costs. In the face of the short-term difficulty that copper prices cannot return to pre-epidemic levels, aside from passing cost increases, the industry has also resorted to measures such as circulation recycling and process improvement. Additionally, the industry has improved energy conservation and production efficiency to quickly cope with the demands of sustainable and net-zero operations for the future.
Information source: Period of Statistics (Sept 2020 to Sept 2021) Organized by Industrial Economics & Knowledge Center (IEK), Industrial Technology Research Institute (ITRI)