Copper consumption and production
Before getting to copper’s history, which is a long one, we should discuss copper in the present-day. About one-third of copper production comes from Latin America, with the majority of that coming from Chile. According to the United States Geological Survey, Chile and Peru are the top copper producers globally with an estimated 5.5 million tons and 2.3 million tons, respectively. China and the United States are the next on the list with 1.74 million tons and 1.41 million tons produced.
In terms of copper reserves, Chile is again by far and way the leader with an estimated 210 million tons with Australia and Peru the next on the list with 89 million and 81 million, respectively. See the entire list from the 2017 USGS below.
As was the case for most commodities between 2000 and 2014, copper consumption increased massively, especially from emerging markets like China and the other BRIC countries. Consumption fell after the commodities super cycle ended, however, it appears that it is slowly creeping its way up again. See an image below from the FocusEconomics Consensus Forecast report for Base Metals showing our production and consumption forecasts through 2020.
Read our most recent copper price outlook for more information on production and price forecasts. You can also download a sample of our full report on Consensus Forecast for Commodities.
Copper history: Early discovery and uses
Copper’s history is a chronicle of human endeavor that dates to prehistoric times with some archaeological evidence suggesting that copper has been used going back 11,000 years. It has been called the first metal mastered by man, as it has a long and storied history.
The oldest known piece of copper used by humans is a pendant that dates back to 8700 BC found not too long ago in northern Iraq. And this is where we will start our journey, over 10,000 years ago in ancient Mesopotamia where civilization began.
It took a few thousand years for our ancient ancestors to progress with their use of copper, but by the 5th to 6th millennia BC, humans discovered how easily copper could be manipulated to create shapes. First they learned that it could easily be hammered into sheets to form shapes and as their skills increased so did the complexity of their work as casting became commonplace to create more intricate objects. Despite the time it took for this to happen, we have to give our ancestors some credit, it was a long time ago. To give you some perspective on how long ago this was, the UK and Ireland were still part of the European mainland continent.
Around 5000 BC humans first began creating tools and weapons out of copper. Although pure copper was used for this purpose, it proved to be too soft in its pure form to be used effectively, so a more durable option was discovered: Bronze. During the 4th millennium BC, copper’s principle alloys, Bronze and Brass were discovered, the former discovery leading to one of the great “ages” of human history, the Bronze Age.
Copper history: The Bronze Age and the Roman Empire
By the 2nd millennium BC, the use of copper and particularly bronze, spread out from Mesopotamia to Europe and as far east as China. Literature from the era shows how developed China’s knowledge of metallurgy was, documenting exact proportions of various kinds of metals to create different grades of alloys for casting into items such as arrows, axes, bells, mirrors, spears and swords.
Around this time in ancient Egypt, copper was being used for piping to convey water in the pyramids, while copper and bronze were also used for balances, instruments, mirrors, razors and weights, among other things.
Although iron smelting ushered in the Iron Age around the 2nd millenium BC, copper and bronze use continued unfettered, especially during the Roman Era. The vast geographical area of the Roman Empire and Roman Republic meant that copper could be mined from as far east as Turkey to as far west as Spain. In fact, copper’s name comes from the Latin word cyprium, most likely since much of the Roman Empire’s copper came from modern-day Cyprus.
The demand for copper was mostly due to the need for coinage. The Romans experimented with various alloys for this purpose, but copper was used in all of them from copper-nickel alloys to brass. The first widely distributed coin made with copper was the Roman dupondius which was made of brass and circulated from 23 BC to AD 200.
In addition to coins, the Romans built massive water systems that were fitted with copper and bronze plumbing. Copper and Bronze were also used for things such as helmets, shields, spears and swords. Production of weapons did eventually shift to iron as the production of iron was less onerous since it was not an alloy like Bronze or Brass, however, ceremonial and decorative items continued to be made from Bronze and Brass.
Despite the shift to iron, the metal’s ability to resist corrosion along with its other favorable properties, which we discuss later in this post, ensured that copper and its principle alloys were used for functional purposes in addition to decorative ones through the Middle Ages, the Industrial Revolution, up to the present day.
Copper history: The Industrial Revolution and the Electricity Age
James Watt’s steam engine marked a key point during the Industrial Revolution and ushered in the modern world. It was dependent largely on iron and coal, however, copper and its alloys played a rather significant role themselves. Nonetheless, copper’s real time to shine did not come until the advent of electricity, when it became the de facto metal for electrical wiring, which it remains to this day.
The 19th century as a whole saw rapid progress in electrical science, laying the foundation for the Electrical Age. However, the late 19th century and thereafter saw a massive jump in demand for copper as tremendous progress was made in electrical engineering while supply increased with new discoveries in mining and smelting techniques. During the 19th century Britain’s superiority in smelting technology made it the world’s major producer of copper, however, mines in the United States, Chile and part of Africa were opened, challenging Britain’s preeminent position. In the early 20th century, innovations in mining and smelting techniques were developed in the U.S. and elsewhere that made it easier to produce copper from lower grades of ore, which resulted in a dramatic expansion of the global copper market. In 1911, the world’s output of smelted copper exceeded a million annual tons for the first time and by 1925 half of all homes in the United States had electric power, 50 years after Thomas Edison’s invention of the first incandescent light.
Copper has been traded on the London Metal Exchange (LME) since its founding in 1877. In fact, it was the only metal traded on the LME until Lead and Zinc were added later. Copper has many favorable properties, which make it a highly functional metal. Some of these include its high ductility, malleability, resistance to corrosion, and electrical conductivity. Because of this, copper is one the most important industrial metals and is used in myriad capacities, especially in construction, electronics, and automobiles and it’s price is therefore highly linked to the health of the global economy.
With that said, let’s take a closer look at some of the uses of copper.
What do we use copper for?
Today, more than 5 million tons of copper are produced annually. It is the third most used metal globally just behind aluminium and steel. Copper and its alloys play vital roles in modern technology and therefore, in our own lives, even if we do not realize it. Copper’s ability to stretch under tensile stress, also known as ductility, led the Ancient Egyptians to use it as water piping dating back to the 4th millennium BC. In the present day, copper is still used in the same capacity all over the world. Copper’s resistance to corrosion, a key reason the Roman’s used it thousands of years ago as the material for the roof of the Pantheon, still in near perfect condition today in Rome, is used for the very same purpose on countless homes and buildings. Copper’s electrical conductivity, which was used during Michael Faraday’s groundbreaking discovery of electromagnetic induction, is still key to modern power generation.
But for what else do we use copper? Well, as it was back in the days of the Roman Empire, it is still one of the principle metals used in the production of coin currency. For example, all U.S. dollar coins are now some kind of copper alloy. Copper is also used in the production of firearms.
As previously mentioned, copper’s ductility and the fact that it is a good conductor of electricity and heat makes it ideal for wiring which is used in just about anything that runs on electricity or battery power. In addition to being used for piping, it is also used in many household fixtures that we can actually see. Many doorknobs and hand rails are made of some kind of copper alloy, usually brass because it looks nice, but also because copper is a natural antibacterial. This makes it ideal for things that are touched by the hands of many people, especially in public places.
Copper sulfate, which is an inorganic compound that combines sulfur and copper, is used as an agricultural poison and an algicide in water purification. Copper compounds are also used in chemical tests for sugar detection.
Copper is also an essential element, meaning that we as humans need around 1.2 milligrams of copper per day to help transfer energy in our cells. However, excess copper is toxic. As they say, everything in moderation.
How is copper mined and processed?
Mining copper is a complicated process, so we will just take you through the basics. Copper mining starts with prospecting where geologists use sophisticated techniques like sampling to determine if an area of land has enough copper to make the mining financially viable, or in other words, worth it for the company doing the mining. Once that is confirmed, copper is mined from massive open pit mines in the form of ore. After ore is taken from the mine, it must then be processed to extract the copper. The ore is crushed and ground to liberate the desired minerals from the waste minerals, also known as gangue minerals. What is left is roasted in furnaces to produce matte, which is essentially the molten minerals. Then it must be refined through various other processes including electrolysis to separate the copper from the other minerals which results in 99.9% pure copper.
If you’d like to learn the specifics of copper processing and mining, have a look a this text from the University of Arizona.
That about wraps it up on copper. If you have any other questions related to copper or would like suggest another commodity for us to cover in our next explainer post, send us an email at blog@focus-economics.com. Also, don’t forget to download one of our sample reports by clicking on the button below.
Read some of our other Commodities Explainer posts:
What is the difference between Brent and WTI crude oil?
Gold: A History of Obsession – Part 1
Gold: The most precious of metals – Part 2
Gold: THe most precious of metals – Part 3
Iron ore: A most underappreciated commodity