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David Humphreys Rio Tinto Chief Economist MelbourneSydney 1 March 20012 March 2001. Metal stocks in weeks’ consumption. end year average for aluminium and copper. Forward Days Cover (OECD Commercial Stocks). Projection (with 1 Mb/d OPEC cut in 2001). Source: BP. - PowerPoint PPT Presentation
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David HumphreysDavid HumphreysRio TintoRio Tinto
Chief EconomistChief Economist
MelbourneMelbourne SydneySydney1 March 20011 March 2001 2 March 20012 March 2001
Metal stocks in weeks’ consumption
0
2
4
6
8
10
12
14
16
18
20
1970 1975 1980 1985 1990 1995 2000
years of cyclical price peaks
end year average for aluminium and copper
45
50
55
60
65
70
90q1 91q1 92q1 93q1 94q1 95q1 96q1 97q1 98q1 99q1 00q1 01q1
Projection(with 1 Mb/d
OPEC cutin 2001)
Forward Days Cover (OECD Commercial Stocks)
Source: BP
Minerals industry capacity utilisation
65
70
75
80
85
90
95
100
71-75 76-80 81-85 86-90 91-95 96-00
Oil refineriesAlumina refineriesAluminium smeltersCopper minesSteel millsIron ore
Sources: BP, IWCC, MG, Rio Tinto, EAA, James F King.Western world only for aluminium and copper.
% capacity utilisation, 5 year averages
Industry exploration expenditure by region
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
91 92 93 94 95 96 97 98 99 00
RoWAfricaAsia PacificL AmericaAustraliaCanadaUSA
US$ billion
Nonferrous metals prices
40
50
60
70
80
90
100
1997 1998 1999 2000 2001
The Economist $ index, 1995=100
World GDP growth
1999 2000 2001
US 4.2 5.0 2.0EU 2.4 3.2 2.7Japan 0.8 1.8 1.4OECD 3.0 3.7 2.2
Korea 10.7 9.1 4.4Taiwan 5.4 6.2 4.9China 7.1 8.0 7.7Latin America 0.0 3.7 3.7
World 2.8 3.9 2.6
Source: Consensus Economics. World GDP uses exchange rate based weights
% change
Consensus forecasts of GDP growth for 2001
0
1
2
3
4
J F M A M J J A S O N D J F
% growth
USA
World
month of forecast 2000 2001
OECD IP and leading indicator of IP
-3
-1
1
3
5
7
9
1997 1998 1999 2000 2001
Year on year % changes
Industrialproduction
Leading indicatorof IP
Source: OECD
Industrial production
-10-8-6-4-202468
10
Q1/99 Q2/99 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01
Japan
USA
Year on year % change
Germany
Shares of world GDP and metals consumption 1999
0
5
10
15
20
25
30
US EU Japan China O Asia L Am CIS/EE RoW
%GDP
Copper
Aluminium
Steel
North American share of metal and mineral markets
Aluminium Borates
Copper Titanium pigments
31% 39%
23% 33%
Housing starts
-30
-20
-10
0
10
20
30
1997 1998 1999 2000 2001
Year on year % changes, moving annual totals
USA
Japan
Source: OECD * permits issued
Germany*
Japan, value of machinery orders
-30
-20
-10
0
10
20
30
1997 1998 1999 2000 2001
Year on year % changes in 3-month moving average
Electronics exports as % of total
0 10 20 30 40 50 60 70
Thailand
Hong Kong
Taiwan
China
Malaysia
South Korea
Singapore
Indonesia
Philippines
first half 2000
China’s market shares
0
2
4
6
8
10
12
14
16
1990 1995 2000
Aluminium Copper Traded Iron Ore
% of total world demand
China’s production of consumer durables
% growth
Personal computers 80Fax machines 50Washing machines 9Refrigerators 15Air conditioning units 32Electric cookers 30Video recorders 15TVs 4Hi-Fis 42
Source: China Metals
Jan-Oct 2000 over Jan-Oct 1999
China: steel and iron ore
0
20
40
60
80
100
120
140
160
90 91 92 93 94 95 96 97 98 99 00
million tonnes
Iron ore production
Iron ore imports
Steel production
Note: Figures on the production of domestic ore have been adjusted to make them comparable with internationally traded ores.
Net imports of copper to China
0
200
400
600
800
1000
1200
1400
1600
1800
90 91 92 93 94 95 96 97 98 99 00
000 tonnes
Semis
Refined Metal
Blister
Concentrates
Estimated copper content, excl scrap and brass products
World refined copper balance
7
8
9
10
11
12
13
14
15
16
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01
prod/cons
-1
0
1
2
3balance
Production
Consumption
million tonnes
Balance
Source: ICSG/Rio Tinto
Copper exchange stocks and prices
40
60
80
100
120
140
160
0 200 400 600 800 1000
stocks, 000 tonnes
Price c/lb
Monthly data, 1989 to 2000
Q1 00
Q4 00
World copper consumption
0
2000
4000
6000
8000
10000
12000
14000
16000
1950 1960 1970 1980 1990 2000
000 tonnes
Copper consumption by end use
Construction
1985 1999Industrialmachinery& equpt
Transport
Electrical &electronic
Consumerproducts
Secondary metal as a share of total consumption
1985 1999
Primary
Secondary
Western world only
Aluminium exchange stocks and prices
40
50
60
70
80
90
100
110
120
0 500 1000 1500 2000 2500 3000
stocks, 000 tonnes
Price c/lb
Monthly data, 1989 to 2000
Q1 00
Q4 00
World primary aluminium balance
121314151617181920212223242526
85 87 89 91 93 95 97 99 01
prod/cons
-1.5
-1
-0.5
0
0.5
1
1.5
2
2.5
3balance
Production
Consumption
million tonnes
Balance
Source: Rio Tinto
Changes in crude steel production 1990-2000
58.1
32.920
-76.4
14.7
-3.9
11.3
59.5
-100
-80
-60
-40
-20
0
20
40
60
80
EU FSU/EE USA Japan China Korea Other* TOTAL
million tonnes, change over period
*Principally India, Taiwan, Mexico, Brazil, Iran
Steel production and iron ore prices
-15
-10
-5
0
5
10
15
20
82 84 86 88 90 92 94 96 98 00
annual % changes in HI fines and in steel production the preceding year
Steel production
Iron ore price
Steel production is world crude steel output less that in the US and FSU (which are largely self-sufficient in iron ore.) Source IISI.
Steel production and prices
-20
-10
0
10
20
1997 1998 1999 2000 2001
yoy %
40
50
60
70
80
90
100
110'94=100
Year on year changes in world steel output and CRU index of world steel prices
Production(l.h. axis)
Prices(r.h. axis)
Sources: IISI and CRU
Steam coal prices in Asian market
10
20
30
40
50
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Spot
NSW Benchmark
Export unit value
US$ per tonne fob
Sources: Australian Coal Report, Barlow Jonker
US electricity consumption and coal exports
1500
2000
2500
3000
3500
1995 1996 1997 1998 1999 2000
Elec, TWh
20
40
60
80
100
120
Net exports, million s.tons
Coal exports(r.h. axis)
Electricity consumption(l.h. axis)
monthly data, moving annual totals
Source: DOE/EIA
Electrical power generation in the USA
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
89 90 91 92 93 94 95 96 97 98 99
OtherGasHydroNuclearCoal
Gross GWh, by fuel source
2.1% a year
1.9% a year
Electrical power generation in Japan
0
200000
400000
600000
800000
1000000
1200000
89 90 91 92 93 94 95 96 97 98 99
OtherGasHydroNuclearCoal
Gross GWh, by fuel source
2.9% a year
6.9% a year
Electrical power generation in Korea
0
50000
100000
150000
200000
250000
300000
89 90 91 92 93 94 95 96 97 98 99
OtherGasHydroNuclearCoal
Gross GWh, by fuel source
10.9% a year
15.8% a year
Electrical power generation in the EU
0
500000
1000000
1500000
2000000
2500000
3000000
89 90 91 92 93 94 95 96 97 98 99
OtherGasHydroNuclearCoal
Gross GWh, by fuel source
1.8% a year
-0.9% a year
Steam coal imports
0
50
100
150
200
250
300
350
400
450
93 94 95 96 97 98 99 0
OtherO AsiaKoreaJapanEurope
million tonnes
5.8% a year
