Shifting Patterns of Supply and Demand in the World Copper Industry

Abstract

Copper industry analysts are predicting the continued decline of traditional copper producing centers in the developed world, particularly the United States, in contrast to the continued robust growth of the industry in underdeveloped countries and consuming centers outside the U.S. These predictions are based on current trends and the theory suggested by Malenbaum of demand maturation, according to which declines in the intensity of metals' use may be an inevitable function of rising per capita income and industrial aging. On supply side, falling grades of ore, rising costs and constraints on environmental damage would aggravate the rate of such declines. This paper examines the economic, geo-technical and engineering bases for making such predictions of significant shifts in the pattern of copper supplies and demands within the framework of a multi-market equilibrium model under free trade. It finds little under competitive conditions to demonstrate that either rapid world growth of copper demands or dr...