In 1988, the prices of a number of metals rose to record levels (Chart 7 and Table 61). In terms of SDRs the average annual price of nickel increased by 172 percent, that of aluminum by 57 percent, zinc by 50 percent, and copper by 40 percent. When measured in terms of U.S. dollars, the rise in prices is even sharper. Notwithstanding the strong upward trend, prices for nickel, aluminum, and copper fluctuated widely during the year. The dollar price of nickel increased by 123 percent from January to April, fell by 36 percent over the following six months, and recovered by 46 percent during the remaining two months of the year. The price of copper fell by 17 percent from January to August and rose 59 percent over the following four months. After a steep rise in the price of aluminum (by 79 percent) during the first half of the year, the price weakened during subsequent months and in December was 31 percent below the peak June level. Zinc prices moved steadily upward during the year. Small increases were recorded in prices of lead, tin, and phosphate rock, while the SDR price of iron ore in 1988 remained unchanged at the 1987 level.
Prices of Minerals and Metals in SDRs, January 1980–April 1989
(1980 = 100)
Prices of Minerals and Metals, 1979–First Quarter 1989
The weights in the index are as follows: copper, 26 percent; aluminum, 20 percent; iron ore, 19 percent; tin, 10 percent; nickel, 8 percent; zinc, 6 percent; lead, 5 percent; and phosphate rock, 6 percent.
London Metal Exchange (LME) price, c.i.f. European ports.
Brazilian ore, c.i.f. German ports.
Cold rolled coil, price for export, f.o.b. European Coal and Steel Community mills.
Moroccan rock, f.a.s. Casablanca.
Prices of Minerals and Metals, 1979–First Quarter 1989
Year | Index of Prices of Minerals and Metals1 |
Copper2 | Tin2 | Aluminum2 | Nickel2 | Zinc2 | Lead2 | Iron Ore3 | Steel4 | Phosphate Rock5 |
|
---|---|---|---|---|---|---|---|---|---|---|---|
(1980 = 100) | (In SDR 0.01 a pound) |
![]() |
(In SDRs a ton) |
![]() |
|||||||
1979 | 92.0 | 69.3 | 542 | 1,241 | 4,624 | 573 | 931 | 18.1 | 285 | 25.5 | |
1980 | 100.0 | 76.2 | 585 | 1,364 | 5,008 | 585 | 696 | 20.9 | 295 | 35.9 | |
1981 | 93.6 | 67.0 | 545 | 1,071 | 5,049 | 717 | 616 | 20.9 | 304 | 42.0 | |
1982 | 88.1 | 60.9 | 527 | 898 | 4,382 | 675 | 494 | 23.7 | 320 | 38.4 | |
1983 | 95.6 | 67.6 | 551 | 1,346 | 4,371 | 715 | 398 | 22.4 | 294 | 34.5 | |
1984 | 94.4 | 60.9 | 541 | 1,221 | 4,636 | 899 | 431 | 22.5 | 307 | 37.3 | |
1985 | 89.9 | 63.3 | 515 | 1,025 | 4,825 | 772 | 385 | 22.3 | 273 | 33.4 | |
1986 | 73.1 | 53.0 | 251 | 980 | 3,315 | 643 | 346 | 18.7 | 265 | 29.2 | |
1987 | 78.7 | 62.5 | 244 | 1,210 | 3,768 | 617 | 461 | 17.2 | 289 | 24.0 | |
1988 | 112.5 | 87.7 | 246 | 1,895 | 10,252 | 923 | 488 | 17.2 | 380 | 26.8 | |
1987 | I | 69.5 | 50.2 | 250 | 1,011 | 2,912 | 590 | 373 | 17.2 | 251 | 24.6 |
II | 73.2 | 53.4 | 245 | 1,103 | 3,289 | 638 | 483 | 16.5 | 270 | 24.0 | |
III | 82.2 | 62.3 | 243 | 1,360 | 4,019 | 623 | 514 | 17.4 | 313 | 24.3 | |
IV | 90.0 | 82.8 | 238 | 1,357 | 4,791 | 617 | 472 | 17.7 | 320 | 23.1 | |
1988 | I | 99.1 | 81.2 | 232 | 1,624 | 7,855 | 666 | 480 | 17.2 | 336 | 26.3 |
II | 116.9 | 80.3 | 237 | 2,211 | 12,335 | 879 | 486 | 16.6 | 383 | 26.3 | |
III | 112.4 | 79.8 | 263 | 1,971 | 10,450 | 996 | 470 | 17.2 | 405 | 27.8 | |
IV | 121.8 | 109.2 | 253 | 1,773 | 10,373 | 1,158 | 515 | 17.7 | 400 | 26.7 | |
1989 | I | 132.2 | 112.1 | 283 | 1,685 | 13,548 | 1,425 | 477 | 19.8 | 418 | 31.6 |
(1980 = 100) | (In U.S. cents a pound) |
![]() |
(In U.S. dollars a ton) |
![]() |
|||||||
1979 | 91.3 | 89.5 | 701 | 1,603 | 5,975 | 741 | 1,203 | 23.4 | 368 | 33.0 | |
1980 | 100.0 | 99.1 | 761 | 1,775 | 6,519 | 761 | 905 | 27.2 | 384 | 46.7 | |
1981 | 84.8 | 79.1 | 643 | 1,263 | 5,953 | 846 | 726 | 24.6 | 358 | 49.5 | |
1982 | 74.8 | 67.2 | 582 | 992 | 4,838 | 745 | 546 | 26.2 | 354 | 42.4 | |
1983 | 78.5 | 72.2 | 589 | 1,438 | 4,673 | 764 | 425 | 24.0 | 315 | 36.9 | |
1984 | 74.4 | 62.5 | 555 | 1,252 | 4,752 | 922 | 442 | 23.1 | 314 | 38.3 | |
1985 | 70.0 | 64.3 | 523 | 1,041 | 4,899 | 783 | 391 | 22.7 | 277 | 33.9 | |
1986 | 65.9 | 62.1 | 294 | 1,150 | 3,889 | 754 | 406 | 21.9 | 310 | 34.3 | |
1987 | 78.4 | 80.8 | 316 | 1,565 | 4,872 | 798 | 596 | 22.2 | 379 | 31.0 | |
1988 | 116.2 | 117.9 | 331 | 2,547 | 13,778 | 1,240 | 656 | 23.1 | 512 | 36.0 | |
1987 | I | 67.3 | 63.3 | 316 | 1,274 | 3,671 | 744 | 470 | 21.6 | 317 | 31.0 |
II | 72.8 | 69.2 | 317 | 1,428 | 4,256 | 825 | 625 | 21.4 | 350 | 31.0 | |
III | 80.6 | 79.5 | 310 | 1,737 | 5,131 | 796 | 656 | 22.2 | 400 | 31.0 | |
IV | 92.9 | 111.2 | 320 | 1,822 | 6,430 | 827 | 633 | 23.7 | 430 | 31.0 | |
1988 | I | 104.2 | 111.1 | 318 | 2,222 | 10,745 | 911 | 656 | 23.5 | 460 | 36.0 |
II | 122.8 | 109.9 | 324 | 3,025 | 16,875 | 1,203 | 664 | 22.8 | 523 | 36.0 | |
III | 111.9 | 103.5 | 341 | 2,557 | 13,553 | 1,291 | 610 | 22.3 | 525 | 36.0 | |
IV | 125.7 | 147.2 | 341 | 2,382 | 13,940 | 1,556 | 692 | 23.9 | 538 | 36.0 | |
1989 | I | 133.9 | 147.4 | 372 | 2,216 | 17,821 | 1,874 | 628 | 26.4 | 550 | 41.5 |
The weights in the index are as follows: copper, 26 percent; aluminum, 20 percent; iron ore, 19 percent; tin, 10 percent; nickel, 8 percent; zinc, 6 percent; lead, 5 percent; and phosphate rock, 6 percent.
London Metal Exchange (LME) price, c.i.f. European ports.
Brazilian ore, c.i.f. German ports.
Cold rolled coil, price for export, f.o.b. European Coal and Steel Community mills.
Moroccan rock, f.a.s. Casablanca.
Prices of Minerals and Metals, 1979–First Quarter 1989
Year | Index of Prices of Minerals and Metals1 |
Copper2 | Tin2 | Aluminum2 | Nickel2 | Zinc2 | Lead2 | Iron Ore3 | Steel4 | Phosphate Rock5 |
|
---|---|---|---|---|---|---|---|---|---|---|---|
(1980 = 100) | (In SDR 0.01 a pound) |
![]() |
(In SDRs a ton) |
![]() |
|||||||
1979 | 92.0 | 69.3 | 542 | 1,241 | 4,624 | 573 | 931 | 18.1 | 285 | 25.5 | |
1980 | 100.0 | 76.2 | 585 | 1,364 | 5,008 | 585 | 696 | 20.9 | 295 | 35.9 | |
1981 | 93.6 | 67.0 | 545 | 1,071 | 5,049 | 717 | 616 | 20.9 | 304 | 42.0 | |
1982 | 88.1 | 60.9 | 527 | 898 | 4,382 | 675 | 494 | 23.7 | 320 | 38.4 | |
1983 | 95.6 | 67.6 | 551 | 1,346 | 4,371 | 715 | 398 | 22.4 | 294 | 34.5 | |
1984 | 94.4 | 60.9 | 541 | 1,221 | 4,636 | 899 | 431 | 22.5 | 307 | 37.3 | |
1985 | 89.9 | 63.3 | 515 | 1,025 | 4,825 | 772 | 385 | 22.3 | 273 | 33.4 | |
1986 | 73.1 | 53.0 | 251 | 980 | 3,315 | 643 | 346 | 18.7 | 265 | 29.2 | |
1987 | 78.7 | 62.5 | 244 | 1,210 | 3,768 | 617 | 461 | 17.2 | 289 | 24.0 | |
1988 | 112.5 | 87.7 | 246 | 1,895 | 10,252 | 923 | 488 | 17.2 | 380 | 26.8 | |
1987 | I | 69.5 | 50.2 | 250 | 1,011 | 2,912 | 590 | 373 | 17.2 | 251 | 24.6 |
II | 73.2 | 53.4 | 245 | 1,103 | 3,289 | 638 | 483 | 16.5 | 270 | 24.0 | |
III | 82.2 | 62.3 | 243 | 1,360 | 4,019 | 623 | 514 | 17.4 | 313 | 24.3 | |
IV | 90.0 | 82.8 | 238 | 1,357 | 4,791 | 617 | 472 | 17.7 | 320 | 23.1 | |
1988 | I | 99.1 | 81.2 | 232 | 1,624 | 7,855 | 666 | 480 | 17.2 | 336 | 26.3 |
II | 116.9 | 80.3 | 237 | 2,211 | 12,335 | 879 | 486 | 16.6 | 383 | 26.3 | |
III | 112.4 | 79.8 | 263 | 1,971 | 10,450 | 996 | 470 | 17.2 | 405 | 27.8 | |
IV | 121.8 | 109.2 | 253 | 1,773 | 10,373 | 1,158 | 515 | 17.7 | 400 | 26.7 | |
1989 | I | 132.2 | 112.1 | 283 | 1,685 | 13,548 | 1,425 | 477 | 19.8 | 418 | 31.6 |
(1980 = 100) | (In U.S. cents a pound) |
![]() |
(In U.S. dollars a ton) |
![]() |
|||||||
1979 | 91.3 | 89.5 | 701 | 1,603 | 5,975 | 741 | 1,203 | 23.4 | 368 | 33.0 | |
1980 | 100.0 | 99.1 | 761 | 1,775 | 6,519 | 761 | 905 | 27.2 | 384 | 46.7 | |
1981 | 84.8 | 79.1 | 643 | 1,263 | 5,953 | 846 | 726 | 24.6 | 358 | 49.5 | |
1982 | 74.8 | 67.2 | 582 | 992 | 4,838 | 745 | 546 | 26.2 | 354 | 42.4 | |
1983 | 78.5 | 72.2 | 589 | 1,438 | 4,673 | 764 | 425 | 24.0 | 315 | 36.9 | |
1984 | 74.4 | 62.5 | 555 | 1,252 | 4,752 | 922 | 442 | 23.1 | 314 | 38.3 | |
1985 | 70.0 | 64.3 | 523 | 1,041 | 4,899 | 783 | 391 | 22.7 | 277 | 33.9 | |
1986 | 65.9 | 62.1 | 294 | 1,150 | 3,889 | 754 | 406 | 21.9 | 310 | 34.3 | |
1987 | 78.4 | 80.8 | 316 | 1,565 | 4,872 | 798 | 596 | 22.2 | 379 | 31.0 | |
1988 | 116.2 | 117.9 | 331 | 2,547 | 13,778 | 1,240 | 656 | 23.1 | 512 | 36.0 | |
1987 | I | 67.3 | 63.3 | 316 | 1,274 | 3,671 | 744 | 470 | 21.6 | 317 | 31.0 |
II | 72.8 | 69.2 | 317 | 1,428 | 4,256 | 825 | 625 | 21.4 | 350 | 31.0 | |
III | 80.6 | 79.5 | 310 | 1,737 | 5,131 | 796 | 656 | 22.2 | 400 | 31.0 | |
IV | 92.9 | 111.2 | 320 | 1,822 | 6,430 | 827 | 633 | 23.7 | 430 | 31.0 | |
1988 | I | 104.2 | 111.1 | 318 | 2,222 | 10,745 | 911 | 656 | 23.5 | 460 | 36.0 |
II | 122.8 | 109.9 | 324 | 3,025 | 16,875 | 1,203 | 664 | 22.8 | 523 | 36.0 | |
III | 111.9 | 103.5 | 341 | 2,557 | 13,553 | 1,291 | 610 | 22.3 | 525 | 36.0 | |
IV | 125.7 | 147.2 | 341 | 2,382 | 13,940 | 1,556 | 692 | 23.9 | 538 | 36.0 | |
1989 | I | 133.9 | 147.4 | 372 | 2,216 | 17,821 | 1,874 | 628 | 26.4 | 550 | 41.5 |
The weights in the index are as follows: copper, 26 percent; aluminum, 20 percent; iron ore, 19 percent; tin, 10 percent; nickel, 8 percent; zinc, 6 percent; lead, 5 percent; and phosphate rock, 6 percent.
London Metal Exchange (LME) price, c.i.f. European ports.
Brazilian ore, c.i.f. German ports.
Cold rolled coil, price for export, f.o.b. European Coal and Steel Community mills.
Moroccan rock, f.a.s. Casablanca.
The large price rises for most metals were associated with the effects on consumption of a sharp acceleration in the growth of industrial production and domestic fixed investment in industrial countries, exceptionally low stock levels, and the absence of substantial excess productive capacity. Industrial production in the major industrial countries grew at an annual rate of 1 percent in 1986, 3 percent in 1987, and 6 percent in 1988 (Table 62). Fixed investment showed a similar development, with an increase of 2 percent in 1986, 4 percent in 1987, and 8 percent in 1988. Much of the excess production capacity that had overhung the market for metals earlier in the decade was closed during 1983–87, as the prolonged period of low prices forced producers to shut down high-cost, unprofitable facilities and sharply cut production costs at others by reducing the labor force and wages. Despite the upturn in prices, producers have been reluctant to reactivate previously closed facilities or to undertake substantial expansions of existing capacity because of uncertainty over how long the world economic expansion would continue. Consequently, the large stock overhang of metals that had accumulated during 1980–82 was steadily reduced and by the end of 1987 stocks were low. In 1988, stronger-than-expected demand, accompanied by supply disruptions in important producing countries, depleted stocks even further.
Movements in Prices of Minerals and Metals and Related Economic Indicators, 1982–88
(Annual percentage change)
Refers to IMF world index of prices of minerals and metals. These percentages differ from those reported in the World Economic Outlook, which refer to the index of commodities exported by developing countries.
Index of dollar prices of minerals and metals deflated by the index of dollar unit values of manufactured exports.
Canada, France, the Federal Republic of Germany, Italy, Japan, the United Kingdom, and the United States.
Updated series with revised definition. Data on housing starts cover only five countries: Canada, France, Japan, the United Kingdom, and the United States.
Overall indices constructed using the same weights for the indices of individual commodities as in overall (world) price index. The commodity coverage of the indices of consumption and stocks is less comprehensive (includes only metals) than the coverage of the indices of production and supply (includes iron ore and phosphate rock).
Supply is defined as production plus beginning-of-year stocks.
Movements in Prices of Minerals and Metals and Related Economic Indicators, 1982–88
(Annual percentage change)
1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 1988 | ||
---|---|---|---|---|---|---|---|---|
Prices of minerals and metals1 | ||||||||
In SDRs | –5.9 | 8.5 | –1.3 | –4.8 | –18.7 | 7.7 | 42.9 | |
In U.S. dollars | –11.8 | 4.9 | –5.2 | –5.9 | –5.9 | 19.0 | 48.2 | |
Real2 | –10.0 | 8.1 | –2.4 | –6.4 | –20.3 | 5.9 | 40.2 | |
Unit value of manufactured exports | ||||||||
In SDRs | 4.5 | 0.4 | 1.2 | 1.9 | 1.9 | 1.6 | 2.0 | |
In U.S. dollars | –2.1 | –2.8 | –3.0 | 1.0 | 17.7 | 12.0 | 6.0 | |
GNP deflator in major industrial countries3 | ||||||||
In SDRs | 6.8 | 4.7 | 3.9 | 3.4 | 3.1 | 2.7 | 2.8 | |
In U.S. dollars | –0.3 | 1.8 | –0.2 | 2.1 | 18.0 | 10.6 | 5.9 | |
Economic activity in major industrial countries3 | ||||||||
Real GNP | –0.4 | 2.9 | 5.2 | 3.4 | 2.7 | 3.4 | 4.2 | |
Industrial production | –3.8 | 3.7 | 8.1 | 2.6 | 1.0 | 3.3 | 6.0 | |
Domestic fixed investment | –5.1 | 4.0 | 9.6 | 4.5 | 1.8 | 4.2 | 8.1 | |
Housing starts4 | –5.1 | 26.0 | –0.3 | 2.3 | 6.5 | 5.0 | –1.8 | |
Automobile production4 | –4.3 | 12.0 | 1.8 | 5.2 | 0.8 | –0.4 | 2.9 | |
World consumption of metals5 | ||||||||
Index of consumption | –4.2 | 3.5 | 5.7 | –0.6 | 2.8 | 3.7 | 2.0 | |
World supply of minerals and metals5 | ||||||||
Index of production | –6.2 | 1.0 | 6.0 | 0.9 | –0.3 | 3.3 | 4.5 | |
Index of supply6 | –3.3 | 5.0 | 5.2 | –0.7 | –0.8 | 1.2 | 1.1 | |
Index of closing stocks | 19.8 | –0.9 | –10.0 | –4.7 | –7.7 | –20.7 | –3.5 |
Refers to IMF world index of prices of minerals and metals. These percentages differ from those reported in the World Economic Outlook, which refer to the index of commodities exported by developing countries.
Index of dollar prices of minerals and metals deflated by the index of dollar unit values of manufactured exports.
Canada, France, the Federal Republic of Germany, Italy, Japan, the United Kingdom, and the United States.
Updated series with revised definition. Data on housing starts cover only five countries: Canada, France, Japan, the United Kingdom, and the United States.
Overall indices constructed using the same weights for the indices of individual commodities as in overall (world) price index. The commodity coverage of the indices of consumption and stocks is less comprehensive (includes only metals) than the coverage of the indices of production and supply (includes iron ore and phosphate rock).
Supply is defined as production plus beginning-of-year stocks.
Movements in Prices of Minerals and Metals and Related Economic Indicators, 1982–88
(Annual percentage change)
1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 1988 | ||
---|---|---|---|---|---|---|---|---|
Prices of minerals and metals1 | ||||||||
In SDRs | –5.9 | 8.5 | –1.3 | –4.8 | –18.7 | 7.7 | 42.9 | |
In U.S. dollars | –11.8 | 4.9 | –5.2 | –5.9 | –5.9 | 19.0 | 48.2 | |
Real2 | –10.0 | 8.1 | –2.4 | –6.4 | –20.3 | 5.9 | 40.2 | |
Unit value of manufactured exports | ||||||||
In SDRs | 4.5 | 0.4 | 1.2 | 1.9 | 1.9 | 1.6 | 2.0 | |
In U.S. dollars | –2.1 | –2.8 | –3.0 | 1.0 | 17.7 | 12.0 | 6.0 | |
GNP deflator in major industrial countries3 | ||||||||
In SDRs | 6.8 | 4.7 | 3.9 | 3.4 | 3.1 | 2.7 | 2.8 | |
In U.S. dollars | –0.3 | 1.8 | –0.2 | 2.1 | 18.0 | 10.6 | 5.9 | |
Economic activity in major industrial countries3 | ||||||||
Real GNP | –0.4 | 2.9 | 5.2 | 3.4 | 2.7 | 3.4 | 4.2 | |
Industrial production | –3.8 | 3.7 | 8.1 | 2.6 | 1.0 | 3.3 | 6.0 | |
Domestic fixed investment | –5.1 | 4.0 | 9.6 | 4.5 | 1.8 | 4.2 | 8.1 | |
Housing starts4 | –5.1 | 26.0 | –0.3 | 2.3 | 6.5 | 5.0 | –1.8 | |
Automobile production4 | –4.3 | 12.0 | 1.8 | 5.2 | 0.8 | –0.4 | 2.9 | |
World consumption of metals5 | ||||||||
Index of consumption | –4.2 | 3.5 | 5.7 | –0.6 | 2.8 | 3.7 | 2.0 | |
World supply of minerals and metals5 | ||||||||
Index of production | –6.2 | 1.0 | 6.0 | 0.9 | –0.3 | 3.3 | 4.5 | |
Index of supply6 | –3.3 | 5.0 | 5.2 | –0.7 | –0.8 | 1.2 | 1.1 | |
Index of closing stocks | 19.8 | –0.9 | –10.0 | –4.7 | –7.7 | –20.7 | –3.5 |
Refers to IMF world index of prices of minerals and metals. These percentages differ from those reported in the World Economic Outlook, which refer to the index of commodities exported by developing countries.
Index of dollar prices of minerals and metals deflated by the index of dollar unit values of manufactured exports.
Canada, France, the Federal Republic of Germany, Italy, Japan, the United Kingdom, and the United States.
Updated series with revised definition. Data on housing starts cover only five countries: Canada, France, Japan, the United Kingdom, and the United States.
Overall indices constructed using the same weights for the indices of individual commodities as in overall (world) price index. The commodity coverage of the indices of consumption and stocks is less comprehensive (includes only metals) than the coverage of the indices of production and supply (includes iron ore and phosphate rock).
Supply is defined as production plus beginning-of-year stocks.
The combined value of export earnings from four major metals—copper (refined), aluminum (unwrought), iron ore, and tin (metal)—increased from an average of SDR 19.6 billion in 1985–87 to SDR 23.6 billion in 1988 (see Table 4). The growth of earnings in 1988 is mainly attributable to the sharp increases in average unit values, as the combined volumes of these exports was only 5 percent above the 1985–87 average. Export receipts from aluminum increased by 60 percent and those from copper by 25 percent; earnings from iron ore and tin exports declined. Over one half of the increase in export earnings accrued to industrial countries, somewhat more than one third to developing countries, and the remainder to the U.S.S.R. and Eastern European countries. As a result, the share of developing countries in export receipts from the four metals declined from 45 percent in 1985 to 41 percent in 1988, while the share of industrial countries rose from 44 percent to 47 percent. This shift in trade shares is mainly attributable to the rapid expansion in earnings from aluminum, a metal exported predominantly by industrial countries.
The somewhat slower world economic growth projected for 1989 and 1990 combined with increased metals production is expected to lead to price declines for a number of metals during 1989 and 1990 from their average 1988 levels. Near-term supplies, are, however, expected to remain tight for some time. Until stocks are gradually restored to more normal levels, even minor supply disruptions can lead to large price increases, as shown by the price movements in the first quarter of 1989 (see Table 61).
Copper
After a prolonged period of low prices from 1982 to 1986, the price of copper rose substantially during 1987 and 1988. In 1988, for the first time, the average annual price of copper exceeded $1.00 a pound. The price of copper declined from an average of $ 1.11 a pound in the first quarter of 1988 to $1.04 a pound in the third quarter, but increased dramatically by 42 percent to $1.47 a pound in the fourth quarter. Already low stocks of copper were reduced further in 1988 by stronger-than-expected consumption production shortfalls in Zaïre and Zambia, production levels in Chile and the United States that fell short of expectations, and, in the fourth quarter, a 52-day miners’ strike in Peru exacerbated the tight supply.
The copper quotations in this section refer to Grade A cathodes, c.i.f. European ports, as traded in contracts of 25 metric tons at the London Metal Exchange (LME); the LME provides contracts for high grade cathodes for all business days up to 3 months and a monthly contract for up to 15 months forward. The LME discontinued its standard copper contract in January 1989. Both standard and high grade copper are traded at the Commodity Exchange (COMEX) in New York in contracts of 25 thousand pounds covering the current calendar month, the 2 succeeding months, and selected months falling within a 23-month period beginning with the current month.
World consumption of refined copper, which is used mainly in construction, electrical and electronic products, and transportation equipment, is estimated to have increased by just 1 percent in 1988, following increases of 4 percent and 3 percent in 1986 and 1987, respectively (Table 63). The small increase contradicts a forecast early in the year of a small decrease for 1988. Japanese consumption is estimated to have expanded by more than 3 percent on account of a surge in capital spending, a high level of construction activity, and a 3 percent increase in automobile production. Consumption in the Federal Republic of Germany is estimated to have increased by 3 percent, reflecting the accelerated growth in industrial production and business investment, the strong export performance of the economy, and the increased use of copper in vehicle production. Although the growth in industrial production in the United States rose from 3.8 percent in 1987 to 5.8 percent in 1988 and business investment from under 3 percent to 10 percent, copper consumption fell marginally largely because of an 8 percent decline in construction activity.
Copper: World Commodity Balance, 1982–88
(In thousands of tons)
Estimated by the Commodities Division, IMF Research Department.
Includes China and Council for Mutual Economic Assistance (CMEA) countries.
World production minus world consumption.
Figures may not agree with production and consumption data because of differences in coverage.
Total commercial stocks reported in terms of weeks of world consumption.
Copper: World Commodity Balance, 1982–88
(In thousands of tons)
1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 19881 | ||
---|---|---|---|---|---|---|---|---|
Mine production 2 | 8,040 | 8,110 | 8,270 | 8,380 | 8,400 | 8,670 | 8,690 | |
Canada | 610 | 650 | 720 | 740 | 700 | 740 | 730 | |
Chile | 1,240 | 1,260 | 1,290 | 1,360 | 1,400 | 1,420 | 1,430 | |
China | 190 | 190 | 190 | 200 | 220 | 270 | 270 | |
Peru | 360 | 320 | 360 | 380 | 390 | 390 | 320 | |
United States | 1,150 | 1,040 | 1,100 | 1,100 | 1,150 | 1,260 | 1,350 | |
U.S.S.R. | 1,010 | 1,020 | 1,020 | 1,030 | 1,030 | 1,010 | 1,020 | |
Zaïre | 500 | 500 | 500 | 500 | 500 | 500 | 440 | |
Zambia | 530 | 590 | 580 | 510 | 510 | 530 | 460 | |
Other countries | 2,450 | 2,540 | 2,510 | 2,560 | 2,500 | 2,550 | 2,670 | |
Refined production 2 | 9,430 | 9,670 | 9,540 | 9,700 | 9,840 | 10,170 | 10,460 | |
Canada | 340 | 460 | 500 | 500 | 490 | 490 | 520 | |
Chile | 850 | 830 | 880 | 880 | 940 | 970 | 1,090 | |
China | 330 | 340 | 360 | 360 | 360 | 440 | 490 | |
Japan | 1,080 | 1,090 | 940 | 940 | 940 | 980 | 960 | |
Peru | 220 | 190 | 220 | 230 | 230 | 220 | 170 | |
United States | 1,690 | 1,580 | 1,490 | 1,440 | 1,480 | 1,560 | 1,820 | |
U.S.S.R. | 1,350 | 1,400 | 1,380 | 1,400 | 1,400 | 1,430 | 1,430 | |
Zaïre | 170 | 230 | 230 | 230 | 220 | 220 | 190 | |
Zambia | 590 | 570 | 520 | 510 | 490 | 510 | 430 | |
Other countries | 2,810 | 2,980 | 3,020 | 3,210 | 3,290 | 3,350 | 3,360 | |
Refined consumption 2 | 9,030 | 9,100 | 9,930 | 9,700 | 10,060 | 10,410 | 10,490 | |
China | 400 | 400 | 410 | 420 | 450 | 490 | 520 | |
Germany, Fed. Rep. of | 730 | 740 | 790 | 750 | 770 | 800 | 820 | |
Japan | 1,240 | 1,220 | 1,370 | 1,230 | 1,220 | 1,280 | 1,320 | |
United States | 1,660 | 1,800 | 2,120 | 1,980 | 2,100 | 2,140 | 2,110 | |
U.S.S.R. | 1,320 | 1,300 | 1,280 | 1,300 | 1,300 | 1,290 | 1,300 | |
Other Asia | 360 | 460 | 540 | 560 | 720 | 810 | 870 | |
Other countries | 3,320 | 3,180 | 3,420 | 3,460 | 3,500 | 3,600 | 3,550 | |
Market balance 3 | 400 | 570 | –390 | 0 | –220 | –240 | –30 | |
Closing stocks of refined copper2,4 | 1,640 | 1,710 | 1,200 | 1,030 | 870 | 480 | 430 | |
United States | 760 | 710 | 600 | 370 | 300 | 120 | 100 | |
COMEX | 250 | 370 | 250 | 110 | 80 | 10 | 10 | |
Other U.S. stocks | 510 | 340 | 340 | 260 | 220 | 110 | 90 | |
Other countries | 880 | 1,000 | 600 | 660 | 570 | 350 | 330 | |
London Metal Exchange | 250 | 440 | 120 | 190 | 170 | 40 | 70 | |
Other country stocks | 630 | 560 | 470 | 480 | 400 | 310 | 260 | |
Stocks/consumption ratio (number of weeks)5 | 9.4 | 9.7 | 6.3 | 5.5 | 4.5 | 2.4 | 2.1 |
Estimated by the Commodities Division, IMF Research Department.
Includes China and Council for Mutual Economic Assistance (CMEA) countries.
World production minus world consumption.
Figures may not agree with production and consumption data because of differences in coverage.
Total commercial stocks reported in terms of weeks of world consumption.
Copper: World Commodity Balance, 1982–88
(In thousands of tons)
1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 19881 | ||
---|---|---|---|---|---|---|---|---|
Mine production 2 | 8,040 | 8,110 | 8,270 | 8,380 | 8,400 | 8,670 | 8,690 | |
Canada | 610 | 650 | 720 | 740 | 700 | 740 | 730 | |
Chile | 1,240 | 1,260 | 1,290 | 1,360 | 1,400 | 1,420 | 1,430 | |
China | 190 | 190 | 190 | 200 | 220 | 270 | 270 | |
Peru | 360 | 320 | 360 | 380 | 390 | 390 | 320 | |
United States | 1,150 | 1,040 | 1,100 | 1,100 | 1,150 | 1,260 | 1,350 | |
U.S.S.R. | 1,010 | 1,020 | 1,020 | 1,030 | 1,030 | 1,010 | 1,020 | |
Zaïre | 500 | 500 | 500 | 500 | 500 | 500 | 440 | |
Zambia | 530 | 590 | 580 | 510 | 510 | 530 | 460 | |
Other countries | 2,450 | 2,540 | 2,510 | 2,560 | 2,500 | 2,550 | 2,670 | |
Refined production 2 | 9,430 | 9,670 | 9,540 | 9,700 | 9,840 | 10,170 | 10,460 | |
Canada | 340 | 460 | 500 | 500 | 490 | 490 | 520 | |
Chile | 850 | 830 | 880 | 880 | 940 | 970 | 1,090 | |
China | 330 | 340 | 360 | 360 | 360 | 440 | 490 | |
Japan | 1,080 | 1,090 | 940 | 940 | 940 | 980 | 960 | |
Peru | 220 | 190 | 220 | 230 | 230 | 220 | 170 | |
United States | 1,690 | 1,580 | 1,490 | 1,440 | 1,480 | 1,560 | 1,820 | |
U.S.S.R. | 1,350 | 1,400 | 1,380 | 1,400 | 1,400 | 1,430 | 1,430 | |
Zaïre | 170 | 230 | 230 | 230 | 220 | 220 | 190 | |
Zambia | 590 | 570 | 520 | 510 | 490 | 510 | 430 | |
Other countries | 2,810 | 2,980 | 3,020 | 3,210 | 3,290 | 3,350 | 3,360 | |
Refined consumption 2 | 9,030 | 9,100 | 9,930 | 9,700 | 10,060 | 10,410 | 10,490 | |
China | 400 | 400 | 410 | 420 | 450 | 490 | 520 | |
Germany, Fed. Rep. of | 730 | 740 | 790 | 750 | 770 | 800 | 820 | |
Japan | 1,240 | 1,220 | 1,370 | 1,230 | 1,220 | 1,280 | 1,320 | |
United States | 1,660 | 1,800 | 2,120 | 1,980 | 2,100 | 2,140 | 2,110 | |
U.S.S.R. | 1,320 | 1,300 | 1,280 | 1,300 | 1,300 | 1,290 | 1,300 | |
Other Asia | 360 | 460 | 540 | 560 | 720 | 810 | 870 | |
Other countries | 3,320 | 3,180 | 3,420 | 3,460 | 3,500 | 3,600 | 3,550 | |
Market balance 3 | 400 | 570 | –390 | 0 | –220 | –240 | –30 | |
Closing stocks of refined copper2,4 | 1,640 | 1,710 | 1,200 | 1,030 | 870 | 480 | 430 | |
United States | 760 | 710 | 600 | 370 | 300 | 120 | 100 | |
COMEX | 250 | 370 | 250 | 110 | 80 | 10 | 10 | |
Other U.S. stocks | 510 | 340 | 340 | 260 | 220 | 110 | 90 | |
Other countries | 880 | 1,000 | 600 | 660 | 570 | 350 | 330 | |
London Metal Exchange | 250 | 440 | 120 | 190 | 170 | 40 | 70 | |
Other country stocks | 630 | 560 | 470 | 480 | 400 | 310 | 260 | |
Stocks/consumption ratio (number of weeks)5 | 9.4 | 9.7 | 6.3 | 5.5 | 4.5 | 2.4 | 2.1 |
Estimated by the Commodities Division, IMF Research Department.
Includes China and Council for Mutual Economic Assistance (CMEA) countries.
World production minus world consumption.
Figures may not agree with production and consumption data because of differences in coverage.
Total commercial stocks reported in terms of weeks of world consumption.
After a period of slow growth, from 1982 to 1986, world mine production increased by 3 percent in 1987. In 1988, however, despite an estimated 3 percent growth in mine production capacity, actual mine output remained at the 1987 level. Growth of production in Mexico, Papua New Guinea, and the United States is estimated to have been largely offset by steep reductions in the output of Peru, Zaïre, and Zambia. In Peru, the number of work stoppages in 1988, including the national miners’ strike from mid-October to mid-December, reduced mine output to about three fourths of the 1987 level.
World production of refined copper increased by an estimated 3 percent in 1988, a higher rate of increase than that recorded for mine production, which was made possible by some reduction in copper ore stocks and an increase in scrap recovery. A 17 percent increase in refined production in the United States, the largest producer of refined copper, together with a 12 percent increase in Chile and a 6 percent increase in Canada outweighed production shortfalls in Peru, Zaïre, and Zambia. Production in Peru fell by about 23 percent largely on account of the strikes, while in Zaïre and Zambia production in each fell by about 15 percent on account of reduced mine output, refining equipment shortages, and transportation problems.
As consumption exceeded production of refined copper from 1984 through 1987, world copper stocks were reduced from nearly ten weeks of consumption at the end of 1983 to little more than two weeks at the end of 1987. Stocks improved in 1988 but deteriorated again toward the end of the year, owing mainly to the Peruvian strike and lower-than-expected output in Chile—because of production problems at CODELCO, the main copper company in Chile and the world’s largest producer. CODELCO lowered its output forecasts several times during the year, revising the total output figure for 1988 again in December to less than 1.1 million tons, or 5 percent below the projections at the beginning of the year. By the end of 1988, commercial stocks were once again estimated to have fallen to the equivalent of about two weeks of consumption.
Export earnings of both copper ore and refined copper in 1988 are estimated to have risen substantially almost entirely because of a rise of about 25 percent in the average unit values (Table 64). With increases in Chile and the industrial countries offset by decreases in Peru, Zaïre, and Zambia, the volume of world exports of refined copper is estimated to have remained at the 1987 level, although that of copper ore is estimated to have increased by a small amount.
Copper: Export Earnings, 1985–88
Data on exports are estimates of the Commodities Division, IMF Research Department.
Copper content.
London Metal Exchange, spot delivery, higher grade cathodes, c.i.f. U.K. ports.
Copper: Export Earnings, 1985–88
1985 | 1986 | 19871 | 19881 | 1985 | 1986 | 19871 | 19881 | |||
---|---|---|---|---|---|---|---|---|---|---|
(In SDRs) | (In U.S. dollars) | |||||||||
Copper Ore | ||||||||||
Earnings (in billions) | 1.7 | 1.6 | 1.7 | 2.1 | 1.7 | 1.9 | 2.2 | 2.9 | ||
Industrial countries | 0.6 | 0.6 | 0.6 | 0.7 | 0.6 | 0.7 | 0.8 | 1.0 | ||
Developing countries | 1.1 | 1.0 | 1.1 | 1.4 | 1.1 | 1.2 | 1.4 | 1.9 | ||
Unit values (a ton) | 1,120 | 1,000 | 1,030 | 1,310 | 1,140 | 1,170 | 1,330 | 1,760 | ||
Industrial countries | 1,060 | 900 | 960 | 1,210 | 1,080 | 1,050 | 1,240 | 1,630 | ||
Developing countries | 1,160 | 1,070 | 1,070 | 1,360 | 1,180 | 1,250 | 1,380 | 1,830 | ||
(In thousands of tons) | ||||||||||
Volumes 2 | 1,530 | 1,590 | 1,620 | 1,670 | 1,530 | 1,590 | 1,620 | 1,670 | ||
Industrial countries | 580 | 650 | 610 | 630 | 580 | 650 | 610 | 630 | ||
Developing countries | 950 | 940 | 1,010 | 1,040 | 950 | 940 | 1,010 | 1,040 | ||
(In SDRs) | (In U.S.dollars) | |||||||||
Refined Copper | ||||||||||
Earnings (in billions) | 4.5 | 3.9 | 4.3 | 5.3 | 4.5 | 4.6 | 5.5 | 7.2 | ||
Industrial countries | 1.3 | 1.2 | 1.3 | 1.7 | 1.3 | 1.4 | 1.7 | 2.3 | ||
Developing countries | 2.8 | 2.4 | 2.6 | 3.2 | 2.8 | 2.8 | 3.3 | 4.3 | ||
U.S.S.R. and Eastern European countries | 0.4 | 0.3 | 0.4 | 0.4 | 0.4 | 0.4 | 0.5 | 0.6 | ||
Unit values (a ton) | 1,370 | 1,190 | 1,270 | 1,610 | 1,390 | 1,400 | 1,640 | 2,170 | ||
Industrial countries | 1,410 | 1,240 | 1,320 | 1,680 | 1,430 | 1,450 | 1,710 | 2,260 | ||
Developing countries | 1,340 | 1,170 | 1,250 | 1,580 | 1,360 | 1,370 | 1,610 | 2,130 | ||
U.S.S.R. and Eastern European countries | 1,420 | 1,220 | 1,260 | 1,610 | 1,440 | 1,430 | 1,630 | 2,160 | ||
Market prices (a ton) 3 | 1,400 | 1,170 | 1,380 | 1,930 | 1,420 | 1,370 | 1,780 | 2,600 | ||
(In thousands of tons) | ||||||||||
Volumes | 3,280 | 3,290 | 3,330 | 3,300 | 3,280 | 3,290 | 3,330 | 3,300 | ||
Industrial countries | 940 | 980 | 980 | 1,030 | 940 | 980 | 980 | 1,030 | ||
Developing countries | 2,040 | 2,020 | 2,070 | 2,000 | 2,040 | 2,020 | 2,070 | 2,000 | ||
Chile | 890 | 900 | 940 | 1,000 | 890 | 900 | 940 | 1,000 | ||
Peru | 180 | 190 | 180 | 170 | 180 | 190 | 180 | 170 | ||
Zaïre | 230 | 220 | 200 | 190 | 230 | 220 | 200 | 190 | ||
Zambia | 510 | 470 | 500 | 440 | 510 | 470 | 500 | 440 | ||
Other | 230 | 240 | 250 | 200 | 230 | 240 | 250 | 200 | ||
U.S.S.R. and Eastern European countries | 300 | 290 | 280 | 270 | 300 | 290 | 280 | 270 |
Data on exports are estimates of the Commodities Division, IMF Research Department.
Copper content.
London Metal Exchange, spot delivery, higher grade cathodes, c.i.f. U.K. ports.
Copper: Export Earnings, 1985–88
1985 | 1986 | 19871 | 19881 | 1985 | 1986 | 19871 | 19881 | |||
---|---|---|---|---|---|---|---|---|---|---|
(In SDRs) | (In U.S. dollars) | |||||||||
Copper Ore | ||||||||||
Earnings (in billions) | 1.7 | 1.6 | 1.7 | 2.1 | 1.7 | 1.9 | 2.2 | 2.9 | ||
Industrial countries | 0.6 | 0.6 | 0.6 | 0.7 | 0.6 | 0.7 | 0.8 | 1.0 | ||
Developing countries | 1.1 | 1.0 | 1.1 | 1.4 | 1.1 | 1.2 | 1.4 | 1.9 | ||
Unit values (a ton) | 1,120 | 1,000 | 1,030 | 1,310 | 1,140 | 1,170 | 1,330 | 1,760 | ||
Industrial countries | 1,060 | 900 | 960 | 1,210 | 1,080 | 1,050 | 1,240 | 1,630 | ||
Developing countries | 1,160 | 1,070 | 1,070 | 1,360 | 1,180 | 1,250 | 1,380 | 1,830 | ||
(In thousands of tons) | ||||||||||
Volumes 2 | 1,530 | 1,590 | 1,620 | 1,670 | 1,530 | 1,590 | 1,620 | 1,670 | ||
Industrial countries | 580 | 650 | 610 | 630 | 580 | 650 | 610 | 630 | ||
Developing countries | 950 | 940 | 1,010 | 1,040 | 950 | 940 | 1,010 | 1,040 | ||
(In SDRs) | (In U.S.dollars) | |||||||||
Refined Copper | ||||||||||
Earnings (in billions) | 4.5 | 3.9 | 4.3 | 5.3 | 4.5 | 4.6 | 5.5 | 7.2 | ||
Industrial countries | 1.3 | 1.2 | 1.3 | 1.7 | 1.3 | 1.4 | 1.7 | 2.3 | ||
Developing countries | 2.8 | 2.4 | 2.6 | 3.2 | 2.8 | 2.8 | 3.3 | 4.3 | ||
U.S.S.R. and Eastern European countries | 0.4 | 0.3 | 0.4 | 0.4 | 0.4 | 0.4 | 0.5 | 0.6 | ||
Unit values (a ton) | 1,370 | 1,190 | 1,270 | 1,610 | 1,390 | 1,400 | 1,640 | 2,170 | ||
Industrial countries | 1,410 | 1,240 | 1,320 | 1,680 | 1,430 | 1,450 | 1,710 | 2,260 | ||
Developing countries | 1,340 | 1,170 | 1,250 | 1,580 | 1,360 | 1,370 | 1,610 | 2,130 | ||
U.S.S.R. and Eastern European countries | 1,420 | 1,220 | 1,260 | 1,610 | 1,440 | 1,430 | 1,630 | 2,160 | ||
Market prices (a ton) 3 | 1,400 | 1,170 | 1,380 | 1,930 | 1,420 | 1,370 | 1,780 | 2,600 | ||
(In thousands of tons) | ||||||||||
Volumes | 3,280 | 3,290 | 3,330 | 3,300 | 3,280 | 3,290 | 3,330 | 3,300 | ||
Industrial countries | 940 | 980 | 980 | 1,030 | 940 | 980 | 980 | 1,030 | ||
Developing countries | 2,040 | 2,020 | 2,070 | 2,000 | 2,040 | 2,020 | 2,070 | 2,000 | ||
Chile | 890 | 900 | 940 | 1,000 | 890 | 900 | 940 | 1,000 | ||
Peru | 180 | 190 | 180 | 170 | 180 | 190 | 180 | 170 | ||
Zaïre | 230 | 220 | 200 | 190 | 230 | 220 | 200 | 190 | ||
Zambia | 510 | 470 | 500 | 440 | 510 | 470 | 500 | 440 | ||
Other | 230 | 240 | 250 | 200 | 230 | 240 | 250 | 200 | ||
U.S.S.R. and Eastern European countries | 300 | 290 | 280 | 270 | 300 | 290 | 280 | 270 |
Data on exports are estimates of the Commodities Division, IMF Research Department.
Copper content.
London Metal Exchange, spot delivery, higher grade cathodes, c.i.f. U.K. ports.
Over the near term, some relaxation in the tight market conditions is expected. Production is projected to expand in the United States—mainly at Bingham Canyon and the Ok Tedi mine in Papua New Guinea. In December 1988, the Neves Corvo project opened in Portugal; production there is projected to reach 300 thousand tons of concentrates in 1989. The recently opened Olympic Dam Mine in Australia has an initial capacity of 45 thousand tons of copper cathodes. In Chile, CODELCO’s output is forecast to rise from about 1.09 million tons in 1988 to 1.25 million in 1989 despite a temporary shutdown of a new flash furnace at the Chuquicamata mine. In Peru, a gradual return to normal production levels is anticipated although labor disputes continued in the first quarter of 1989. With world copper consumption expected to remain at about, or slightly below, the 1988 level during 1989, a weakening in the average price level of copper is not unlikely. Quotations on the New York futures market for copper indicate substantial easing of prices during the year; however, until stocks are rebuilt, from the historically low levels prevailing at the end of 1988, any supply disruption or unexpected strength in consumption could raise prices substantially. Developments with respect to labor disputes in Chile, Mexico, and Peru were associated with considerable fluctuation in prices in the first four months of 1989—a drop from $1.54 a pound in January to $1.40 a pound in February, then an increase to $1.48 in March followed by a decrease to $1.41 in April. In addition, uncertainty concerning the outcome of labor negotiations in North America, which are anticipated in the spring of 1989, could contribute to further price volatility during the year.
Aluminum
The average price for aluminum rose by 63 percent to a record level of $2,547 a ton in 1988. This sharp increase followed increases of 10 percent in 1986 and 36 percent in 1987, with the result that by 1988 the aluminum price was, on average, nearly 150 percent above the average of three years earlier; however, during 1988 the price fluctuated widely. It rose from about $2,000 a ton in January to a high of over $4,200 in mid-June, with most of the increase occurring in late May and early June. By late June, the price fell sharply and then drifted down to an average of $2,300 in October before leveling off at about $2,450 at the end of the year. The major factors underlying these price movements during 1988 were strong demand for aluminum, particularly from the automotive industry, low inventories of the metal, a strike at a large Canadian smelter, and concern about possible work disruptions elsewhere.
Prices used in this section (through the end of 1988) are the cash quotations at the LME for standard grade metal with a minimum 99.5 percent aluminum content, c.i.f., European ports. The contracts for standard grade were, however, discontinued at the end of 1988 and all trading in line with market requirements was based on existing contracts for high grade aluminum. LME transactions on aluminum are in contracts of 25 metric tons and cover all business days up to 3 months and monthly contracts for up to 15 months forward. Aluminum is also traded at the COMEX, but this market does not have an important position in international price formation because of very thin trading volumes.
World consumption of primary aluminum, which is widely used in building and construction, transportation, consumer durables, and packaging, is estimated to have risen by about 3 percent in 1988, down from a growth rate of 6 percent in 1987 (Table 65). The growth of consumption in Japan accelerated from 3 percent in 1987 to 10 percent in 1988, with the increase being attributable mainly to increased use in the automotive manufacturing sector. In the United States, consumption was only slightly above the previous year’s level, despite considerable growth in the beverage can market and an increase of about 6 percent in automobile production. With strong investment expenditure, construction output, and a boom in car sales, the United Kingdom registered a strong increase of 6 percent in consumption, Italy an increase of 4 percent, and the Federal Republic of Germany an increase of 3 percent. Only marginal increases are estimated for the other European countries, which are also major markets for aluminum.
Aluminum: World Commodity Balance, 1982–88
(In millions of tons)
Estimated by Commodities Division, IMF Research Department.
World production minus world consumption.
May not agree with production and consumption data because of differences in coverage.
Reported commercial stocks expressed as weeks of world consumption.
Aluminum: World Commodity Balance, 1982–88
(In millions of tons)
1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 19881 | ||
---|---|---|---|---|---|---|---|---|
Bauxite production | 77.9 | 78.6 | 92.3 | 89.6 | 92.6 | 94.9 | 99.0 | |
Australia | 23.6 | 24.4 | 31.5 | 31.8 | 32.4 | 34.2 | 35.8 | |
Brazil | 4.2 | 5.2 | 6.4 | 5.8 | 6.4 | 6.6 | 6.6 | |
Guinea | 11.8 | 13.0 | 14.7 | 14.0 | 14.8 | 16.3 | 16.3 | |
Jamaica | 8.2 | 7.7 | 8.7 | 6.2 | 7.0 | 7.7 | 7.4 | |
Suriname | 3.1 | 2.8 | 3.4 | 3.7 | 3.7 | 2.6 | 3.4 | |
U.S.S.R. | 6.4 | 6.3 | 6.2 | 6.4 | 6.3 | 4.9 | 6.3 | |
Yugoslavia | 3.7 | 3.5 | 3.3 | 3.5 | 3.5 | 3.4 | 3.5 | |
Other countries | 16.9 | 15.7 | 18.1 | 18.2 | 18.5 | 19.2 | 19.7 | |
Alumina production | 22.2 | 23.3 | 27.1 | 25.5 | 26.1 | 28.1 | 28.8 | |
Aluminum | ||||||||
Primary production | 14.0 | 14.3 | 15.9 | 15.5 | 15.5 | 16.3 | 17.3 | |
Australia | 0.4 | 0.5 | 0.8 | 0.9 | 0.9 | 1.0 | 1.1 | |
Brazil | 0.3 | 0.4 | 0.5 | 0.5 | 0.8 | 0.8 | 0.9 | |
Canada | 1.1 | 1.1 | 1.2 | 1.3 | 1.4 | 1.5 | 1.5 | |
Germany, Fed. Rep. of | 0.7 | 0.7 | 0.8 | 0.7 | 0.8 | 0.7 | 0.7 | |
Norway | 0.6 | 0.7 | 0.8 | 0.7 | 0.7 | 0.8 | 0.8 | |
U.S.S.R. | 2.4 | 2.4 | 2.3 | 2.3 | 2.4 | 2.4 | 2.4 | |
United States | 3.3 | 3.4 | 4.1 | 3.5 | 3.0 | 3.3 | 3.9 | |
Other countries | 5.2 | 5.1 | 5.4 | 5.6 | 5.5 | 5.8 | 5.9 | |
Primary consumption | 14.1 | 15.4 | 15.6 | 15.9 | 16.1 | 17.1 | 17.6 | |
China | 0.6 | 0.6 | 0.6 | 0.7 | 0.8 | 0.8 | 0.9 | |
France | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 | |
Germany, Fed. Rep. of | 1.0 | 1.1 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | |
Japan | 1.6 | 1.8 | 1.6 | 1.7 | 1.6 | 1.7 | 1.9 | |
U.S.S.R. | 1.9 | 1.9 | 1.8 | 1.8 | 1.7 | 1.8 | 1.8 | |
United States | 3.6 | 4.2 | 4.5 | 4.3 | 4.3 | 4.5 | 4.6 | |
Other countries | 4.8 | 5.2 | 5.3 | 5.6 | 5.9 | 6.5 | 6.6 | |
Market balance 2 | –0.1 | –1.1 | 0.3 | –0.4 | –0.6 | –0.8 | –0.3 | |
Ending stocks 3 | 3.2 | 2.2 | 2.8 | 2.5 | 2.0 | 1.5 | 1.6 | |
Metal exchanges | 0.3 | 0.2 | 0.2 | 0.3 | 0.1 | 0.1 | 0.1 | |
Producers | 2.9 | 2.0 | 2.6 | 2.2 | 1.9 | 1.4 | 1.5 | |
Stocks/consumption ratio (number of weeks)4 | 11.7 | 7.6 | 9.3 | 8.0 | 6.4 | 4.5 | 4.8 |
Estimated by Commodities Division, IMF Research Department.
World production minus world consumption.
May not agree with production and consumption data because of differences in coverage.
Reported commercial stocks expressed as weeks of world consumption.
Aluminum: World Commodity Balance, 1982–88
(In millions of tons)
1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 19881 | ||
---|---|---|---|---|---|---|---|---|
Bauxite production | 77.9 | 78.6 | 92.3 | 89.6 | 92.6 | 94.9 | 99.0 | |
Australia | 23.6 | 24.4 | 31.5 | 31.8 | 32.4 | 34.2 | 35.8 | |
Brazil | 4.2 | 5.2 | 6.4 | 5.8 | 6.4 | 6.6 | 6.6 | |
Guinea | 11.8 | 13.0 | 14.7 | 14.0 | 14.8 | 16.3 | 16.3 | |
Jamaica | 8.2 | 7.7 | 8.7 | 6.2 | 7.0 | 7.7 | 7.4 | |
Suriname | 3.1 | 2.8 | 3.4 | 3.7 | 3.7 | 2.6 | 3.4 | |
U.S.S.R. | 6.4 | 6.3 | 6.2 | 6.4 | 6.3 | 4.9 | 6.3 | |
Yugoslavia | 3.7 | 3.5 | 3.3 | 3.5 | 3.5 | 3.4 | 3.5 | |
Other countries | 16.9 | 15.7 | 18.1 | 18.2 | 18.5 | 19.2 | 19.7 | |
Alumina production | 22.2 | 23.3 | 27.1 | 25.5 | 26.1 | 28.1 | 28.8 | |
Aluminum | ||||||||
Primary production | 14.0 | 14.3 | 15.9 | 15.5 | 15.5 | 16.3 | 17.3 | |
Australia | 0.4 | 0.5 | 0.8 | 0.9 | 0.9 | 1.0 | 1.1 | |
Brazil | 0.3 | 0.4 | 0.5 | 0.5 | 0.8 | 0.8 | 0.9 | |
Canada | 1.1 | 1.1 | 1.2 | 1.3 | 1.4 | 1.5 | 1.5 | |
Germany, Fed. Rep. of | 0.7 | 0.7 | 0.8 | 0.7 | 0.8 | 0.7 | 0.7 | |
Norway | 0.6 | 0.7 | 0.8 | 0.7 | 0.7 | 0.8 | 0.8 | |
U.S.S.R. | 2.4 | 2.4 | 2.3 | 2.3 | 2.4 | 2.4 | 2.4 | |
United States | 3.3 | 3.4 | 4.1 | 3.5 | 3.0 | 3.3 | 3.9 | |
Other countries | 5.2 | 5.1 | 5.4 | 5.6 | 5.5 | 5.8 | 5.9 | |
Primary consumption | 14.1 | 15.4 | 15.6 | 15.9 | 16.1 | 17.1 | 17.6 | |
China | 0.6 | 0.6 | 0.6 | 0.7 | 0.8 | 0.8 | 0.9 | |
France | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 | |
Germany, Fed. Rep. of | 1.0 | 1.1 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | |
Japan | 1.6 | 1.8 | 1.6 | 1.7 | 1.6 | 1.7 | 1.9 | |
U.S.S.R. | 1.9 | 1.9 | 1.8 | 1.8 | 1.7 | 1.8 | 1.8 | |
United States | 3.6 | 4.2 | 4.5 | 4.3 | 4.3 | 4.5 | 4.6 | |
Other countries | 4.8 | 5.2 | 5.3 | 5.6 | 5.9 | 6.5 | 6.6 | |
Market balance 2 | –0.1 | –1.1 | 0.3 | –0.4 | –0.6 | –0.8 | –0.3 | |
Ending stocks 3 | 3.2 | 2.2 | 2.8 | 2.5 | 2.0 | 1.5 | 1.6 | |
Metal exchanges | 0.3 | 0.2 | 0.2 | 0.3 | 0.1 | 0.1 | 0.1 | |
Producers | 2.9 | 2.0 | 2.6 | 2.2 | 1.9 | 1.4 | 1.5 | |
Stocks/consumption ratio (number of weeks)4 | 11.7 | 7.6 | 9.3 | 8.0 | 6.4 | 4.5 | 4.8 |
Estimated by Commodities Division, IMF Research Department.
World production minus world consumption.
May not agree with production and consumption data because of differences in coverage.
Reported commercial stocks expressed as weeks of world consumption.
World output of bauxite, the mineral used in aluminum production, grew by an estimated 5 percent in 1988 to about 100 million tons. The expansion is mainly attributable to increased production in Australia, a recovery of production in the U.S.S.R. from the low 1987 level to more typical levels of preceding years, and a partial recovery of production in Suriname.
World production of primary aluminum is estimated to have grown by 6 percent in 1988 following a 5 percent rise in 1987. The expansion of output was facilitated by an increase in utilization rates to almost full capacity as well as by the opening of new capacity. In the United States, the world’s major aluminum producer, production in 1987–88 recovered from the sharp 1985–86 decline owing to much higher prices and a weaker U.S. dollar, which enabled U.S. producers to recapture market shares. U.S. production grew by 18 percent in 1988 to nearly 4 million tons, with almost all of the available capacity fully utilized. This gain in output accounted for more than 60 percent of the world’s increases in production. Comparatively small production increases were registered in Australia, Brazil, India, and Venezuela.
The scrap aluminum market has gained importance in the current tight market conditions. Scrap is widely used for cansheet and castings. Particularly in Europe, more emphasis has been placed on the recycling of aluminum container products, such as beverage cans. The secondary industry provides above one third the volume of primary aluminum consumed in Europe and almost as much in the United States.
World primary consumption of aluminum outpaced world primary production by a considerable margin in the first half of 1988, but during the second half of the year production outpaced consumption. Commercial stocks at the end of 1988 are estimated to have been the equivalent of close to five weeks of world aluminum consumption—slightly higher than at the end of 1987 but only about half the amount four years earlier. Stocks on the LME at the end of 1988 were well above the exceptionally low levels that prevailed throughout the first half of 1988.
The large price rises of aluminum in 1987 and 1988 were reflected in the increases in export earnings of aluminum (Table 66). Global earnings from the export of unwrought aluminum in 1988 are estimated at SDR 14.5 million. This amount is roughly two thirds above that for 1985–86 and is greater than the export earnings in 1988 for any other non-fuel primary commodity, including wheat, the traditional leader. About 60 percent of the earnings from exports of unwrought aluminum were obtained by industrial countries, close to 30 percent by developing countries, and more than 10 percent by the U.S.S.R. and Eastern European countries. Less than 20 percent of the rise in earnings from 1986 to 1988 was attributed to volume increases. Over the same period, earnings from exports of bauxite changed little; the large price rise of aluminum was only weakly reflected in the price of bauxite and the increases in the volume of bauxite were also small.
Aluminum: Export Earnings, 1985–88
Data on exports are estimates of the Commodities Division, IMF Research Department.
Actual weight.
London Metal Exchange, spot delivery, 99.5 percent aluminum, in the form of T-bars or ingots, c.i.f. European ports.
Aluminum: Export Earnings, 1985–88
1985 | 1986 | 1987 | 19881 | 1985 | 1986 | 1987 | 19881 | |||
---|---|---|---|---|---|---|---|---|---|---|
(In SDRs) | (In U.S. dollars) | |||||||||
Bauxite | ||||||||||
Earnings (in billions) | 0.9 | 0.8 | 0.7 | 0.8 | 0.9 | 0.9 | 0.9 | 1.0 | ||
Industrial countries | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | ||
Developing countries | 0.8 | 0.7 | 0.6 | 0.7 | 0.8 | 0.8 | 0.8 | 0.9 | ||
Unit values (a ton) | 27.0 | 24.7 | 22.0 | 22.2 | 27.4 | 29.0 | 28.4 | 29.9 | ||
Industrial countries | 17.0 | 15.0 | 13.8 | 11.8 | 17.2 | 17.5 | 17.9 | 15.9 | ||
Developing countries | 29.2 | 27.0 | 23.7 | 24.6 | 29.6 | 31.6 | 30.7 | 33.1 | ||
(In millions of tons) | ||||||||||
Volumes 2 | 32.8 | 31.0 | 31.7 | 33.5 | 32.8 | 31.0 | 31.7 | 33.5 | ||
Industrial countries | 5.8 | 5.7 | 5.6 | 6.3 | 5.8 | 5.7 | 5.6 | 6.3 | ||
Developing countries | 27.0 | 25.3 | 26.1 | 27.2 | 27.0 | 25.3 | 26.1 | 27.2 | ||
Guinea | 13.0 | 13.2 | 14.0 | 14.1 | 13.0 | 13.2 | 14.0 | 14.1 | ||
Jamaica | 2.6 | 2.9 | 3.4 | 3.3 | 2.6 | 2.9 | 3.4 | 3.3 | ||
Other | 11.4 | 9.2 | 8.7 | 9.8 | 11.4 | 9.2 | 8.7 | 9.8 | ||
(In SDRs) | (In U.S. dollars) | |||||||||
Unwrought aluminum | ||||||||||
Earnings (in billions) | 7.4 | 7.2 | 9.0 | 14.5 | 7.5 | 8.4 | 11.7 | 19.5 | ||
Industrial countries | 4.8 | 4.5 | 5.6 | 9.1 | 4.9 | 5.3 | 7.3 | 12.2 | ||
Developing countries | 1.8 | 1.9 | 2.5 | 3.9 | 1.8 | 2.2 | 3.2 | 5.3 | ||
U.S.S.R. and Eastern European countries | 0.8 | 0.8 | 0.9 | 1.5 | 0.8 | 0.9 | 1.2 | 2.0 | ||
Unit values (a ton) | 1,120 | 1,080 | 1,310 | 2,050 | 1,140 | 1,270 | 1,700 | 2,750 | ||
Industrial countries | 1,150 | 1,100 | 1,350 | 2,110 | 1,170 | 1,290 | 1,740 | 2,840 | ||
Developing countries | 1,110 | 1,100 | 1,380 | 2,080 | 1,130 | 1,290 | 1,780 | 2,790 | ||
U.S.S.R. and Eastern European countries | 980 | 960 | 1,030 | 1,650 | 1,000 | 1,130 | 1,330 | 2,220 | ||
Market prices (a ton) 3 | 1,020 | 980 | 1,210 | 1,890 | 1,040 | 1,150 | 1,570 | 2,540 | ||
(In millions of tons) | ||||||||||
Volumes | 6.6 | 6.6 | 6.9 | 7.1 | 6.6 | 6.6 | 6.9 | 7.1 | ||
Industrial countries | 4.2 | 4.1 | 4.2 | 4.3 | 4.2 | 4.1 | 4.2 | 4.3 | ||
Developing countries | 1.6 | 1.7 | 1.8 | 1.9 | 1.6 | 1.7 | 1.8 | 1.9 | ||
U.S.S.R. and Eastern European countries | 0.8 | 0.8 | 0.9 | 0.9 | 0.8 | 0.8 | 0.9 | 0.9 |
Data on exports are estimates of the Commodities Division, IMF Research Department.
Actual weight.
London Metal Exchange, spot delivery, 99.5 percent aluminum, in the form of T-bars or ingots, c.i.f. European ports.
Aluminum: Export Earnings, 1985–88
1985 | 1986 | 1987 | 19881 | 1985 | 1986 | 1987 | 19881 | |||
---|---|---|---|---|---|---|---|---|---|---|
(In SDRs) | (In U.S. dollars) | |||||||||
Bauxite | ||||||||||
Earnings (in billions) | 0.9 | 0.8 | 0.7 | 0.8 | 0.9 | 0.9 | 0.9 | 1.0 | ||
Industrial countries | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | ||
Developing countries | 0.8 | 0.7 | 0.6 | 0.7 | 0.8 | 0.8 | 0.8 | 0.9 | ||
Unit values (a ton) | 27.0 | 24.7 | 22.0 | 22.2 | 27.4 | 29.0 | 28.4 | 29.9 | ||
Industrial countries | 17.0 | 15.0 | 13.8 | 11.8 | 17.2 | 17.5 | 17.9 | 15.9 | ||
Developing countries | 29.2 | 27.0 | 23.7 | 24.6 | 29.6 | 31.6 | 30.7 | 33.1 | ||
(In millions of tons) | ||||||||||
Volumes 2 | 32.8 | 31.0 | 31.7 | 33.5 | 32.8 | 31.0 | 31.7 | 33.5 | ||
Industrial countries | 5.8 | 5.7 | 5.6 | 6.3 | 5.8 | 5.7 | 5.6 | 6.3 | ||
Developing countries | 27.0 | 25.3 | 26.1 | 27.2 | 27.0 | 25.3 | 26.1 | 27.2 | ||
Guinea | 13.0 | 13.2 | 14.0 | 14.1 | 13.0 | 13.2 | 14.0 | 14.1 | ||
Jamaica | 2.6 | 2.9 | 3.4 | 3.3 | 2.6 | 2.9 | 3.4 | 3.3 | ||
Other | 11.4 | 9.2 | 8.7 | 9.8 | 11.4 | 9.2 | 8.7 | 9.8 | ||
(In SDRs) | (In U.S. dollars) | |||||||||
Unwrought aluminum | ||||||||||
Earnings (in billions) | 7.4 | 7.2 | 9.0 | 14.5 | 7.5 | 8.4 | 11.7 | 19.5 | ||
Industrial countries | 4.8 | 4.5 | 5.6 | 9.1 | 4.9 | 5.3 | 7.3 | 12.2 | ||
Developing countries | 1.8 | 1.9 | 2.5 | 3.9 | 1.8 | 2.2 | 3.2 | 5.3 | ||
U.S.S.R. and Eastern European countries | 0.8 | 0.8 | 0.9 | 1.5 | 0.8 | 0.9 | 1.2 | 2.0 | ||
Unit values (a ton) | 1,120 | 1,080 | 1,310 | 2,050 | 1,140 | 1,270 | 1,700 | 2,750 | ||
Industrial countries | 1,150 | 1,100 | 1,350 | 2,110 | 1,170 | 1,290 | 1,740 | 2,840 | ||
Developing countries | 1,110 | 1,100 | 1,380 | 2,080 | 1,130 | 1,290 | 1,780 | 2,790 | ||
U.S.S.R. and Eastern European countries | 980 | 960 | 1,030 | 1,650 | 1,000 | 1,130 | 1,330 | 2,220 | ||
Market prices (a ton) 3 | 1,020 | 980 | 1,210 | 1,890 | 1,040 | 1,150 | 1,570 | 2,540 | ||
(In millions of tons) | ||||||||||
Volumes | 6.6 | 6.6 | 6.9 | 7.1 | 6.6 | 6.6 | 6.9 | 7.1 | ||
Industrial countries | 4.2 | 4.1 | 4.2 | 4.3 | 4.2 | 4.1 | 4.2 | 4.3 | ||
Developing countries | 1.6 | 1.7 | 1.8 | 1.9 | 1.6 | 1.7 | 1.8 | 1.9 | ||
U.S.S.R. and Eastern European countries | 0.8 | 0.8 | 0.9 | 0.9 | 0.8 | 0.8 | 0.9 | 0.9 |
Data on exports are estimates of the Commodities Division, IMF Research Department.
Actual weight.
London Metal Exchange, spot delivery, 99.5 percent aluminum, in the form of T-bars or ingots, c.i.f. European ports.
Prospects for continued easing of the tight market in the near future are not unfavorable. Production is expected to register further growth owing to capacity expansions in late 1988 and others envisaged for 1989–91. In October 1988, a major U.S. refinery (Burnside), closed in 1985, was recommissioned to come on stream at the end of 1988 with a yearly capacity of 500 thousand tons. Roughly 1 million tons could be added between 1989–91, from Venezuela, Jamaica, Australia, and other countries. Venezuela is planning to expand its primary aluminum production capacity from 420 thousand tons in 1988 to 860 thousand tons by 1990 in line with bauxite mine developments; bauxite output, which was only 240 thousand tons in 1987, is forecast to reach 1 million tons in 1989. In Jamaica, restarts of mines and refineries—among them the Nair refinery in early 1989—are expected to increase aluminum production by 200 thousand tons in 1989 and 500 thousand tons in 1990. Australia’s output of aluminum is forecast to rise by 15 percent to 1.23 million tons owing to a new smelter in Victoria, which reached its capacity in September 1988 and is scheduled to increase its output rate by 10 percent during 1989. A half million ton expansion in aluminum smelter capacity in Canada is envisaged over the period 1989–92. The construction of a 200 thousand ton aluminum smelter in France to start production in 1991 was announced in November 1988, and there are also plans for a new smelter in Saudi Arabia and an increase in Brazilian production. Secondary production is expected to continue to increase.
Aluminum consumption is expected to grow moderately in 1989, supported mainly by the container market where the share of aluminum in the production of cans for beverages is expected to increase. In the transportation market, the increased usage per car is expected to be offset by lower automobile production. One factor that will influence demand growth is the development of the competitive position of aluminum over other materials, especially copper and plastics. Although high aluminum prices during the first part of 1988 temporarily reversed this relationship, copper prices rose in the second half while those of aluminum declined, thereby supporting the competitiveness of aluminum in spite of its high price.
In the absence of severe supply disruptions, these developments are likely to lead to a weakening of the aluminum price from the average level of 1988. To the extent that inventories are rebuilt, the tendency toward price volatility should also be reduced. The signing of new three-year labor contracts by U.S. aluminum producers, six months ahead of schedule, has removed one potentially major disruptive element to supply. Indeed, in the first four months of 1989, the price of aluminum fell from an average of $2,400 a ton in January to $2,125 a ton in April.
Iron Ore
Throughout much of the 1980s demand for iron ore has been weak, reflecting developments in the steel industry and overall excess capacity in ore production that has co-existed with increasing production of high quality, low-cost ore from new projects. While c.i.f. dollar prices in European ports increased by 4 percent in 1988, much of the change is attributable to rising costs of transportation, which account for about 25 percent of c.i.f. prices. Thus, despite an increase in 1988 of over 6 percent in world output of steel, the main determinant of the demand for iron ore, and a 35 percent increase in the dollar price of steel (31 percent in SDRs), on an f.o.b. basis, the price for iron ore continued to weaken. Even c.i.f. prices in 1988 were below the levels of the 1980–83 period.
The international marketing of iron ore is mainly conducted within the framework of long-term contracts with annual renegotiations of prices. Over the years, typical market patterns have developed: Australian exporters negotiate with Japanese steel mills, Brazilian and Swedish exporters with German buyers, and Canadian iron ore producers with U.S. steel mills. Even the timing for the settlements seems to follow a pattern where the negotiated price between the Brazilians and the Germans sets the path for other negotiations; in the last three years, however, the Japanese have led the annual price rounds.
The increase in steel production in 1988 was the largest since 1984 (Table 67). Reflecting the robust growth in industrial production and business investment, crude steel output in industrial countries increased by 9 percent. As a group, industrial countries accounted for two thirds of the global expansion in output. Crude steel output in the EC is estimated to have risen to 137 thousand tons, about 17 percent of world production, with Belgium, the Federal Republic of Germany, and the United Kingdom accounting for most of the increase. In Japan, crude steel production grew by over 7 percent to 105 thousand tons. In both the EC and Japan the increases in production are associated with substantially higher production of capital goods and automobiles. Output of crude steel in the United States in 1988 rose by over 12 percent to 90 thousand tons. Demand for steel for use in the machinery and equipment sectors was strong, although this was partly offset by a slowdown in private and public construction activities and a depressed petroleum and gas sector. Production in the newly industrializing economies of Asia and in Brazil also expanded rapidly. Output is estimated to have increased by 44 percent in Taiwan Province of China to over 8 thousand tons, by 14 percent in Korea to over 19 thousand tons, and by 11 percent in Brazil to 25 thousand tons. Only a small increase of about 1 percent, however, is estimated for the U.S.S.R., the world’s largest steel producer. Voluntary restraint agreements and import regulations continued to restrict international steel trade in 1988.
Iron Ore: World Commodity Balance Together with Production of Pig Iron and Steel, 1982–88
(In millions of tons)
Estimates of the Commodities Division, IMF Research Department.
Production minus exports plus imports.
Iron Ore: World Commodity Balance Together with Production of Pig Iron and Steel, 1982–88
(In millions of tons)
1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 19881 | ||
---|---|---|---|---|---|---|---|---|
Production of iron ore | 813 | 776 | 876 | 904 | 917 | 948 | 990 | |
Australia | 88 | 71 | 94 | 93 | 92 | 104 | 118 | |
Brazil | 93 | 92 | 112 | 128 | 129 | 136 | 145 | |
China | 107 | 114 | 122 | 132 | 150 | 157 | 162 | |
U.S.S.R. | 244 | 245 | 247 | 248 | 250 | 251 | 253 | |
United States | 37 | 39 | 52 | 50 | 39 | 48 | 51 | |
Other countries | 244 | 215 | 249 | 253 | 257 | 252 | 261 | |
Apparent consumption of iron ore 2 | 823 | 777 | 871 | 905 | 911 | 939 | 995 | |
Brazil | 20 | 22 | 24 | 36 | 37 | 39 | 43 | |
China | 109 | 118 | 128 | 142 | 164 | 168 | 170 | |
Germany, Fed. Rep. of | 40 | 37 | 44 | 46 | 42 | 40 | 44 | |
Japan | 122 | 110 | 126 | 125 | 116 | 112 | 120 | |
U.S.S.R. | 201 | 202 | 201 | 204 | 203 | 206 | 208 | |
United States | 49 | 48 | 64 | 60 | 51 | 60 | 70 | |
Other countries | 282 | 240 | 284 | 292 | 298 | 314 | 340 | |
Production of pig iron | 473 | 462 | 491 | 500 | 492 | 500 | 525 | |
Of which: industrial countries | 221 | 220 | 240 | 241 | 222 | 225 | 242 | |
Production of crude steel | 646 | 662 | 710 | 719 | 714 | 734 | 780 | |
Of which: industrial countries | 323 | 328 | 358 | 355 | 330 | 337 | 368 |
Estimates of the Commodities Division, IMF Research Department.
Production minus exports plus imports.
Iron Ore: World Commodity Balance Together with Production of Pig Iron and Steel, 1982–88
(In millions of tons)
1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 19881 | ||
---|---|---|---|---|---|---|---|---|
Production of iron ore | 813 | 776 | 876 | 904 | 917 | 948 | 990 | |
Australia | 88 | 71 | 94 | 93 | 92 | 104 | 118 | |
Brazil | 93 | 92 | 112 | 128 | 129 | 136 | 145 | |
China | 107 | 114 | 122 | 132 | 150 | 157 | 162 | |
U.S.S.R. | 244 | 245 | 247 | 248 | 250 | 251 | 253 | |
United States | 37 | 39 | 52 | 50 | 39 | 48 | 51 | |
Other countries | 244 | 215 | 249 | 253 | 257 | 252 | 261 | |
Apparent consumption of iron ore 2 | 823 | 777 | 871 | 905 | 911 | 939 | 995 | |
Brazil | 20 | 22 | 24 | 36 | 37 | 39 | 43 | |
China | 109 | 118 | 128 | 142 | 164 | 168 | 170 | |
Germany, Fed. Rep. of | 40 | 37 | 44 | 46 | 42 | 40 | 44 | |
Japan | 122 | 110 | 126 | 125 | 116 | 112 | 120 | |
U.S.S.R. | 201 | 202 | 201 | 204 | 203 | 206 | 208 | |
United States | 49 | 48 | 64 | 60 | 51 | 60 | 70 | |
Other countries | 282 | 240 | 284 | 292 | 298 | 314 | 340 | |
Production of pig iron | 473 | 462 | 491 | 500 | 492 | 500 | 525 | |
Of which: industrial countries | 221 | 220 | 240 | 241 | 222 | 225 | 242 | |
Production of crude steel | 646 | 662 | 710 | 719 | 714 | 734 | 780 | |
Of which: industrial countries | 323 | 328 | 358 | 355 | 330 | 337 | 368 |
Estimates of the Commodities Division, IMF Research Department.
Production minus exports plus imports.
In line with the increases in steel production and in response to steadily rising prices for crude steel and scrap, world pig iron production is estimated to have increased in 1988 by about 6 percent. About two thirds of pig iron production was provided by industrial countries. World production of direct reduced iron is also estimated to have expanded, owing particularly to a 34 percent rise in Brazilian production.
In response to the rise in steel production, iron ore production rose by 3 percent in 1987 and is estimated to have increased by a further 4 percent in 1988. Most of the increase in output in 1988 is attributable to Brazil (33 percent), Australia (33 percent), and China (12 percent). Since 1983, Brazilian iron ore production has increased by 63 percent, mainly on account of expanded production at the Carajas project, where low-cost high quality ore is produced.
About 39 percent of world production of iron ore is traded internationally. After stagnating at an average, level of about 367 million tons during the period 1985–87, the volume of exports increased by 5 percent in 1988 (Table 68). The volume of exports from industrial countries, which has been declining, grew by 7 percent in 1988. Mainly because of increased shipments from Brazil, the volume of exports from developing countries rose by 4 percent in 1988. Owing to lower export unit values, only a negligible increase in earnings from iron ore exports in terms of dollars was recorded, while in terms of SDRs earnings declined.
Iron Ore: Export Earnings, 1985–88
Data on exports are estimates of the Commodities Division, IMF Research Department.
Iron ore content of 61.5 percent.
Iron ore content of 64.5 percent.
Iron Ore: Export Earnings, 1985–88
1985 | 1986 | 1987 | 19881 | 1985 | 1986 | 1987 | 19881 | ||
---|---|---|---|---|---|---|---|---|---|
(In SDRs) | (In U.S. dollars) | ||||||||
Earnings (in billions) | 6.9 | 5.9 | 5.3 | 5.1 | 7.0 | 6.9 | 6.8 | 6.9 | |
Industrial countries | 3.0 | 2.3 | 2.0 | 1.9 | 3.0 | 2.7 | 2.6 | 2.6 | |
Developing countries | 3.0 | 2.7 | 2.4 | 2.3 | 3.1 | 3.1 | 3.0 | 3.1 | |
U.S.S.R. and Eastern European countries | 0.9 | 0.9 | 0.9 | 0.9 | 0.9 | 1.1 | 1.2 | 1.2 | |
Unit values (a ton) | 19 | 16 | 14 | 13 | 19 | 19 | 18 | 18 | |
Industrial countries | 20 | 16 | 14 | 13 | 20 | 19 | 18 | 17 | |
Developing countries | 18 | 15 | 13 | 13 | 18 | 18 | 17 | 17 | |
U.S.S.R. and Eastern European countries | 21 | 20 | 21 | 19 | 21 | 23 | 27 | 26 | |
Brazilian ore prices (a ton) | |||||||||
C.i.f. German ports2 | 22.4 | 18.7 | 17.2 | 17.2 | 22.7 | 21.9 | 22.2 | 23.1 | |
F.o.b.3 | 26.2 | 22.4 | 18.9 | 17.5 | 26.6 | 26.3 | 24.5 | 23.5 | |
(In millions of tons) | |||||||||
Volumes | 371 | 365 | 375 | 385 | 371 | 365 | 367 | 385 | |
Industrial countries | 153 | 143 | 142 | 152 | 153 | 143 | 142 | 152 | |
Australia | 85 | 80 | 80 | 91 | 85 | 80 | 80 | 91 | |
Canada | 32 | 31 | 30 | 33 | 32 | 31 | 30 | 33 | |
Other | 36 | 32 | 32 | 28 | 36 | 32 | 32 | 28 | |
Developing countries | 175 | 175 | 180 | 186 | 175 | 175 | 180 | 186 | |
Brazil | 92 | 92 | 97 | 107 | 92 | 92 | 97 | 107 | |
India | 29 | 32 | 29 | 30 | 29 | 32 | 29 | 30 | |
Other | 54 | 51 | 54 | 49 | 54 | 51 | 54 | 49 | |
U.S.S.R. and Eastern European countries | 43 | 47 | 45 | 47 | 43 | 47 | 45 | 47 |
Data on exports are estimates of the Commodities Division, IMF Research Department.
Iron ore content of 61.5 percent.
Iron ore content of 64.5 percent.
Iron Ore: Export Earnings, 1985–88
1985 | 1986 | 1987 | 19881 | 1985 | 1986 | 1987 | 19881 | ||
---|---|---|---|---|---|---|---|---|---|
(In SDRs) | (In U.S. dollars) | ||||||||
Earnings (in billions) | 6.9 | 5.9 | 5.3 | 5.1 | 7.0 | 6.9 | 6.8 | 6.9 | |
Industrial countries | 3.0 | 2.3 | 2.0 | 1.9 | 3.0 | 2.7 | 2.6 | 2.6 | |
Developing countries | 3.0 | 2.7 | 2.4 | 2.3 | 3.1 | 3.1 | 3.0 | 3.1 | |
U.S.S.R. and Eastern European countries | 0.9 | 0.9 | 0.9 | 0.9 | 0.9 | 1.1 | 1.2 | 1.2 | |
Unit values (a ton) | 19 | 16 | 14 | 13 | 19 | 19 | 18 | 18 | |
Industrial countries | 20 | 16 | 14 | 13 | 20 | 19 | 18 | 17 | |
Developing countries | 18 | 15 | 13 | 13 | 18 | 18 | 17 | 17 | |
U.S.S.R. and Eastern European countries | 21 | 20 | 21 | 19 | 21 | 23 | 27 | 26 | |
Brazilian ore prices (a ton) | |||||||||
C.i.f. German ports2 | 22.4 | 18.7 | 17.2 | 17.2 | 22.7 | 21.9 | 22.2 | 23.1 | |
F.o.b.3 | 26.2 | 22.4 | 18.9 | 17.5 | 26.6 | 26.3 | 24.5 | 23.5 | |
(In millions of tons) | |||||||||
Volumes | 371 | 365 | 375 | 385 | 371 | 365 | 367 | 385 | |
Industrial countries | 153 | 143 | 142 | 152 | 153 | 143 | 142 | 152 | |
Australia | 85 | 80 | 80 | 91 | 85 | 80 | 80 | 91 | |
Canada | 32 | 31 | 30 | 33 | 32 | 31 | 30 | 33 | |
Other | 36 | 32 | 32 | 28 | 36 | 32 | 32 | 28 | |
Developing countries | 175 | 175 | 180 | 186 | 175 | 175 | 180 | 186 | |
Brazil | 92 | 92 | 97 | 107 | 92 | 92 | 97 | 107 | |
India | 29 | 32 | 29 | 30 | 29 | 32 | 29 | 30 | |
Other | 54 | 51 | 54 | 49 | 54 | 51 | 54 | 49 | |
U.S.S.R. and Eastern European countries | 43 | 47 | 45 | 47 | 43 | 47 | 45 | 47 |
Data on exports are estimates of the Commodities Division, IMF Research Department.
Iron ore content of 61.5 percent.
Iron ore content of 64.5 percent.
Although it is unlikely that the growth in world steel production that occurred in 1988 and continued in the first quarter of 1989 will be sustained throughout 1989, the strong demand for iron ore in 1988 and the first quarter of 1989 reduced iron ore stocks and created more favorable conditions for iron ore producers in their price negotiations with consumers. Price negotiations for 1989 shipments of iron ore started in November 1988 in both Europe and Japan following the usual bilateral pattern. Repeating the course of events in 1988, the first settlement was reached between an Australian mine and Japanese steel producers; an increase in dollar prices of 15 percent on average was agreed, including a 13 percent rise in prices for fine grades of ore and a 17 percent rise in prices for lump ore. This settlement largely determined the outcome of negotiations between Companhia Vale do Rio Doce (CVRD), a Brazilian producer, and German buyers who concluded a similar agreement in December; it by and large set the trend for other iron ore price negotiations. Prices in the first quarter of 1989 were 19 percent above the 1988 level.
Tin
In 1988, prices for tin continued to recover from the 1986 low that followed the collapse of market stabilization operations under the International Tin Agreements.62 Trade in contracts for tin on the LME was suspended in October 1985 in the wake of the collapse of the market stabilization operations; plans for a resumption of trading by mid-1989 have been announced. Trade at the Kuala Lumpur Tin Market (KLTM) was also suspended but resumed three months later in February 1986. In January 1987, the KLTM extended coverage to include Indonesian and Thai tin, in addition to Malaysian tin. In October 1987, a tin futures contract was introduced on the Kuala Lumpur Commodity Exchange (KLCE); the trading volume through early 1989, however, has remained low. Tin prices in this section for the period since 1985 refer to the quotations for transactions for tin metal by New York tin dealers, the leading import “market” since the suspension of tin trading on the LME.
The gradually rising prices—tin prices on average were about 5 percent higher in 1988 compared with 1987—reflect a moderately expanding demand for tin and the successful management of supply, particularly by the members of the Association of Tin Producing Countries (ATPC).63 In the aftermath of the 1985 breakdown of operations by the International Tin Council, the ATPC established an export quota agreement with the objective of gradually reducing the overhang in world stocks, which stood at about 100 thousand tons at the end of 1985. The export quota scheme constrained total exports of ATPC member countries to 96 thousand tons in the 1987/88 marketing year (March–February) and to 101.9 thousand tons in 1988/89. National export quota allocations were made for the major nonmember exporters of tin: 26.5 thousand tons for Brazil and 10.0 thousand tons for China. With world consumption at 227 thousand tons in 1987 and an estimated 234 thousand tons in 1988, the export restraints resulted in a considerable reduction of commercial stocks within a short period—to about 25 thousand tons at the end of 1988.64 At their meeting in October 1988, the ATPC member countries agreed to continue the scheme for a third year but postponed the decision on the size of new total and individual export quotas to January 1989.
World mine production of tin is estimated to have risen in 1988 by 11 percent (Table 69). A large part of the increase occurred in Brazil where mine output was raised by over 50 percent to 44 thousand tons. As a consequence, Brazil accounted for over 20 percent of world mine production in 1988 compared with less than 4 percent in 1982 and is now the world’s largest producer. The increase in 1988 came largely from the Amazon State of Rondonia where production from a new low-cost mine began in September 1987. Although Bolivian production increased by 25 percent in 1988, the level of production remained less than half that obtained in the early 1980s. With the mine rehabilitation program of Corporación Minera de Bolivia (Comibol) suffering from delays, most of the increase in Bolivia’s production came from small mines and cooperatives.
Tin: World Commodity Balance, 1982–88
(In thousands of tons)
Estimates of the Commodities Division, IMF Research Department.
World production minus world consumption.
Total commercial stocks reported at end of period.
Some of the stocks held by the International Tin Council (ITC) prior to the collapse of its market operations in October 1985 may not be included at the end of 1985 in the series of commercial stocks.
Commercial stocks measured as weeks of consumption.
ITC creditors acquired the ITC stocks following collapse of ITC market operations.
Tin: World Commodity Balance, 1982–88
(In thousands of tons)
1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 19881 | |
---|---|---|---|---|---|---|---|
Mine production | 225 | 210 | 205 | 197 | 184 | 185 | 205 |
Bolivia | 27 | 25 | 20 | 16 | 11 | 8 | 10 |
Brazil | 8 | 13 | 20 | 27 | 25 | 29 | 44 |
China | 16 | 17 | 18 | 20 | 25 | 28 | 30 |
Indonesia | 34 | 27 | 23 | 22 | 25 | 26 | 30 |
Malaysia | 52 | 41 | 41 | 37 | 29 | 30 | 29 |
Thailand | 26 | 20 | 22 | 17 | 17 | 15 | 14 |
U.S.S.R. | 16 | 17 | 17 | 16 | 16 | 15 | 16 |
Other countries | 46 | 50 | 44 | 42 | 36 | 34 | 32 |
Refined production | 229 | 208 | 212 | 210 | 200 | 202 | 223 |
Bolivia | 19 | 14 | 16 | 12 | 8 | 3 | 5 |
Brazil | 9 | 13 | 19 | 25 | 25 | 29 | 42 |
China | 17 | 17 | 17 | 19 | 20 | 25 | 28 |
Indonesia | 30 | 28 | 23 | 20 | 22 | 24 | 28 |
Malaysia | 63 | 53 | 43 | 46 | 44 | 44 | 46 |
Thailand | 26 | 19 | 20 | 18 | 22 | 15 | 14 |
U.S.S.R. | 17 | 18 | 19 | 18 | 18 | 17 | 17 |
Other countries | 48 | 46 | 55 | 52 | 41 | 45 | 43 |
Consumption | 204 | 206 | 222 | 216 | 223 | 227 | 234 |
China | 13 | 13 | 14 | 11 | 12 | 12 | 14 |
Germany, Fed. Rep. of | 14 | 14 | 16 | 16 | 17 | 17 | 17 |
Japan | 29 | 30 | 33 | 32 | 32 | 33 | 33 |
United States | 34 | 36 | 39 | 38 | 34 | 37 | 42 |
U.S.S.R. | 27 | 29 | 30 | 30 | 26 | 26 | 26 |
Other countries | 87 | 84 | 90 | 89 | 102 | 102 | 102 |
Market balance 2 | 25 | 2 | –10 | –6 | –23 | –25 | –11 |
Commercial stocks 3 | 57 | 63 | 49 | 73 4 | 57 | 35 | 25 |
Stocks/consumption ratio (number of weeks)5 | 14.5 | 15.8 | 11.5 | 17.5 | 13.3 | 8.0 | 5.6 |
ITC stocks | 53 | 55 | 62 | 0 6 | 0 | 0 | 0 |
U.S. strategic stocks | 194 | 191 | 193 | 188 | 180 | 176 | 175 |
Estimates of the Commodities Division, IMF Research Department.
World production minus world consumption.
Total commercial stocks reported at end of period.
Some of the stocks held by the International Tin Council (ITC) prior to the collapse of its market operations in October 1985 may not be included at the end of 1985 in the series of commercial stocks.
Commercial stocks measured as weeks of consumption.
ITC creditors acquired the ITC stocks following collapse of ITC market operations.
Tin: World Commodity Balance, 1982–88
(In thousands of tons)
1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 19881 | |
---|---|---|---|---|---|---|---|
Mine production | 225 | 210 | 205 | 197 | 184 | 185 |