Singapore 21/09/2016 - The global refined copper industry recorded a production deficit of around 306,000 tonnes in January through June, which equates to a seasonally adjusted deficit of about 227,000 tonnes, the International Copper Study Group (ICSG) said on Tuesday.
This compares with a production deficit of 54,000 tonnes or a seasonally adjusted surplus of about 27,000 tonnes for the same period of 2015.
In June alone, the market showed an apparent production deficit of around 83,000 tonnes mainly due to strong Chinese apparent refined copper demand.
World apparent refined usage in the first half increased by around five percent or 570,000 tonnes year-on-year mainly due to strong Chinese apparent demand.
Chinese apparent demand increased by around 11 percent based on a 20-percent-increase in net imports of refined copper from the lower net import level in early 2015 and consequently lower apparent demand, ICSG said. Excluding China, world usage remained essentially unchanged.
On a regional basis, usage is estimated to have increased by 5 percent in Europe and 7 percent in Asia - when excluding China, Asia usage declined by 2 percent - while declining by 17 percent and 4 percent in Africa and in the Americas respectively and remaining essentially unchanged in Oceania.
World mine production rose by 4.5 percent or 430,000 tonnes year-on-year in the first six months of the year. Concentrate production increased by 6 percent while solvent extraction-electrowinning (SX-EW) declined by 1 percent.
The increase in world mine production was mainly due to a 50-percent-rise in Peruvian output that is benefitting from new and expanded capacity brought on stream in the last two years. A recovery in production levels in Canada and the United States, expanded capacity in Mexico and a ramp-up in production in Mongolia also contributed to world growth, ICSG said.
But this was partially offset by a 5.5-percent-decline in production in Chile and a 10-percent-drop in the DRC where output is constrained by temporary production cuts. On a regional basis, production rose by 7 percent in the Americas and 6 percent in Asia, but declined by 4 percent in Africa while remaining essentially unchanged in Europe and Oceania, the trade group added.
Global refined production climbed by 3 percent or 320,000 tonnes year-on-year in the first half. Primary production was up by 2.5 percent and secondary production from scrap rose 4.5 percent.
The main contributor to growth was China which saw a 6 percent growth, followed by the United States where production increased by 16 percent. Output in Chile and Japan - the second and third leading refined copper producers - increased by around 2 percent and 3 percent respectively. Refined production in the DRC and Zambia declined due to the impact of temporary production cuts.
China’s bonded stocks increased by around 155,000 tonnes year-on-year during the first half. The world refined copper balance adjusted for the change in Chinese bonded stocks indicates a production deficit of around 151,000 tonnes during the period compared to a surplus of about 16,000 tonnes in the first half of 2015.