John Holland, President, International Copper Association. Copper Demand in Asia Growth Trends and Drivers for New Applications

Transcription

1 John Holland, President, International Copper Association Copper Demand in Asia Growth Trends and Drivers for New Applications

2 Contents Asia Copper Consumption Overview Assessing Growing Copper Markets And Key Drivers New Drivers And Growth Applications 2 Presentation title and date

3 World and Asia Copper Semis End-use 30,000 Copper Semis End-use, (kt) 25,000 20,000 15,000 10,000 Other Regions Major Asia markets 5, Major Asia markets: China, India, Japan, ASEAN, South Korea, Taiwan Source: IWCC/ICA Copper Semis End Use Data Set 3

4 World and Asia Consumption Overview 2012 World Copper Semis End-use: 24,845 kt Japan, 8% Other Regions, 36% Asia, 64% China 63% Others, 6% Taiwan, 3% ASEAN, 7% South India, Korea, 6% 7% Source: IWCC/ICA Copper Semis End Use Data Set 4

5 Asia Copper Consumption by Sectors 2012 Asia Copper Semis End-use by Sectors Other Equipment 25% Building Construction 26% Cooling Equipment 10% Transport 12% Industrial 11% Infrastructure 16% Source: IWCC/ICA Copper Semis End Use Data Set 5

6 Contents Asia Copper Consumption Overview Assessing Growing Copper Markets And Key Drivers New Drivers And Growth Applications 6 Presentation title and date

7 Building Construction 26% Plumbing Building Plant Architecture 80% Communications Electrical Power 7

8 Building Construction Market Growth China- Urbanization is expected to reach 60% in 2020 Real estate market accelerated in 2013 y/y growth of 2012 Q1-Q3/2013 Investment 14.9% 19.7% New floor space -7% 7% India and Developing Asia: Population in 2012: 2.06bln Population in 2032: 2.52bln Number of person per households will be smaller. More housing demand Intensity of Copper Usage Living Standard Improvement Higher design standard requires more copper wires Mandatory Standard Future implementation in poor and rural areas in Asia to increase standardized copper wiring Cost Saving Substitution threat from aluminum alloy cable Source: NBS, Global Demographics Ltd., ICA 8

9 Infrastructure 16% Power Utility 85% Telecommunications 9

10 Infrastructure Market Growth In China, Copper-intensive power distribution network is receiving more investment than power transmission China Power Grid Investment (bln CNY) 46% 62% Power distribution Power transmission Intensity of Copper Usage Energy efficiency increase Efficient transformers use more copper, and increasing market share Low carbon- distributed energy generation has higher intensity of copper usage Source: China Electricity Regulatory Commission, ICA 10

11 Industrial 11% 49% 51% Electrical Non Electrical 11

12 Industrial Market Growth In China, industrial sector grew stronger in 2013 vs y/y growth of 2012 Q1-Q3/2013 Electricity consumption in industrial sector Industrial motor production 4% 6.4% -0.8% 8% Industrialization still has a large potential in Central and West China, as well as in India and other developing Asian economies Intensity of Copper Usage 10 HP Motor Standard High Premium Super Premium Motor Efficiency Source: NBS, ICA 12

13 Transport 12% 42% 52% Automotive Electrical Automotive Non Electrical 6% Other Transport 13

14 Transport Market Growth In Q1-Q3/2013, China s automobile production and railway investment grew 12.8% and 7.4% y/y, respectively Large gap exists in railway construction vs. world s more developed countries 2.00 Railway length per capita (meter/person), ,000 Intensity of Copper Usage Electrified railway- more copper cables in railway system Railway System Length of Electrified Railway (km) Length of Non-electrified Railway (km) ,000 60,000 35% 52% ,000 20,000 Source: NBS, The Economist

15 Cooling and Other Equipment Manufacturing 25% 10% 25% Consumer & General Products Cooling Electronic 10% Diverse 15

16 Cooling and Other Equipment Market Growth China s Air-Conditioner industry recovered in 2013 y/y growth of 2012 Q1-Q3/2013 Domestic sales -5% 4.7% Export -3% 6.3% Opportunity in urbanization and rural market Ownership of air-conditioner in China (2011): Urban-119 units per 100 household Rural-23 units per 100 household Intensity of Copper Usage Energy Efficiency: Copper density increases by % per 1% increase of energy efficiency rate Energy standard upgrade Consumer awareness on energy saving Government subsidy for high efficiency products Substitution and miniaturization: smaller diameter tube and aluminum micro channel heat exchanger Source: NBS, ChinaIOL 16

17 Contents Asia Copper Consumption Overview Assessing Growing Copper Markets And Key Drivers New Drivers And Growth Applications 17 Presentation title and date

18 EV Infrastructure Copper usage in charging stations (China study): ~20kg per charging point At least 15 tonnes per one mid-large sized charging station. Tonnage is even higher at early stage Cable accounts for over 80% of copper usage, mostly 10kV to connect with grid Source: ICA, State Grid, Marchwin 18

19 EV Infrastructure Growth prospect: Stage One: Funding with no payback Stage Two: Larger battery, some with payback Stage Three: Commercialization Pure electric cars sold (k) Total car charging stations ,670 5, ,854 12,000 Copper demand: from 582 tonnes in 2012 to 71,350 tonnes in 2027, 30-40% of demand will be from Asia. Source: IDTechEx, ICA 19

20 CMR Target Market New Build Motor CMR's target market ( kW), 0% 2012 China AC Motor market segmentation by power (GW) :Total 257GW Other AC motor, 37% Three-phase squirrel cage induction motor, 64% Target Market Motor Size kW Production volume: 114GW CMR's target market, 70% Other market, 30% Source: ICA 20 August 28, 2013

21 Copper Growth Potential (New build motor) Copper in kt Current Copper Usage in Windings Market Potential - Copper in Rotor Total Copper Potential Source: ICA 21 August 28, 2013

22 Rotor Replacement Opportunity exists in installed motors to improve energy efficiency by replacing the current AL rotor with Cu rotors 2.2 kw, 4 Poles, 50Hz motor Al rotor -> Copper rotor Efficiency: 83%-> 86.5%* IE1 -> IE3 Refurbishment Options Cost Difficulty Reliability Skill Copper used Re-winding Medium Medium Medium High Equal or slight change Change Lamination High High Medium Medium Equal Change Rotor Low Low High Low Increased Copper tonnage potential: 40K tonnes in 2016 by assuming only 5% repaired motor accept rotor replacement to increase efficiency Source: ICA, Nord Group 22 August 28, 2013

23 Distributed Energy Generation Copper density is much higher in distributed power generation plants To replace 1kW of coal power generation capacity, 3-4kW wind/solar/hydro power generation capacity is needed Installed capacity of distributed power generation will triple from , while the growth of large coal-fire plant will be controlled Copper density of different types of power generation (kg/kw) Biomass Methane Natural gas 100,000 80,000 60,000 Growth capacity of distributed power generation (MV) 77,535 Solar Small-mid sized wind 40,000 20,000 27,162 Source: ICA, RMR Coal

24 Summary Asia continues to be the key driver of global copper consumption Urbanization and living standard improvement will increase the intensity of copper usage Sustainable development and environmental concerns will create new demand for EV, energy-saving motors, transformers and other applications generating new copper demand 24

25 Thank You!