ICSG: Refined copper balance data January – April 2015 indicates production surplus

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Sheet copper (Foto: © H.D. Volz /http://www.pixelio.de)

Lisbon, Portugal — According to preliminary ICSG data of the International Copper Study Group (ICSG), after four months of consecutive surplus the refined copper market balance for April 2015 showed an apparent production deficit of about 80,000 metric tonnes (t), mainly due to strong Chinese apparent demand. When making seasonal adjustments for world refined production and usage, April showed a production deficit of around 30,000 t. The refined copper balance for the first four months of 2015, including revisions to data previously presented, indicates a production surplus of around 60,000 t (a seasonally adjusted surplus of 67,000 t). This compares with a production deficit of 436,000 t (a seasonally adjusted deficit of 435,000 t) for the same period of 2014.

In the first four months of 2015, world apparent usage is estimated to have declined by around 4 percent (290,000 t) compared with that in the same period of 2014. Chinese apparent demand declined by 5 percent (165,000 t) based on a 14 percent decrease in net imports of refined copper from the high net import level in early 2014 and consequently higher apparent usage. However, Chinese apparent usage in April was the highest since December 2014. Excluding China, world usage declined by around 3 percent in the first four months of 2015 mainly due to a decline of 43 percent in Russia’s apparent usage (following the withdrawal of Russia’s cathode export tax in September 2014) and a decline of 6 percent and 7 percent in Japan and the EU, respectively. On a regional basis, usage is estimated to have declined by 3 percent in Asia (when excluding China, Asia usage increased by 2 percent), by 11 percent in Europe and by 75 percent in Oceania. Usage increased by 4 percent and 2.5 percent in Africa and the Americas, respectively.

World mine production is estimated to have increased by around 3 percent (175,000 t) in the first four months of 2015 compared with production in the same period of 2014. Concentrate production increased by 3 percent while solvent extraction-electrowinning (SX-EW) increased by 3.5 percent. The increase in world mine production was mainly due to a recovery in production levels at mines in Indonesia and Chile, although the latter also benefited from production at mines that started last year. Production in Peru increased by 4 percent and in the United States production declined by 6 percent. On a regional basis, production rose by 2.5 percent in Africa, 3 percent in South America, 11 percent in Asia and 1 percent in Europe, but declined by 5 percent in North America and 3 percent in Oceania. The average world mine capacity utilization rate for the first four months of 2015 declined slightly to 85 percent from 86 percent in the same period of 2014.

World refined production is estimated to have increased by around 3 percent (210,000 t) in the first four months of 2015 compared with refined production in the same period of 2014: primary production was up by 2 percent and secondary production (from scrap) was up by 8.5 percent. The main contributor to growth was China (up by 6 percent), followed by the Philippines and Indonesia where production was reduced in the first quarter of last year due to operational constraints. Production also increased in the DRC (+14 percent). Output in Chile, Japan and the United States (the second, third and fourth leading refined copper producers) each declined by around 4 percent. On a regional basis, refined production is estimated to have increased in Africa (7 percent) and Asia (6 percent) and to have declined in the Americas (-1 percent) and Oceania (16 percent) while remaining essentially unchanged in Europe. The average world refinery capacity utilization rate for the first four months of 2015 remained unchanged as compared to the same period of 2014.

Based on the average of stock estimates provided by independent consultants, China’s bonded stocks increased by 30,000 t in the first four months of 2015 from the yearend 2014 level. Stocks increased by around 190,000 t in the same period of 2014. In the first four months of 2015, the world refined copper balance adjusted for the change in Chinese bonded stocks indicates a production surplus of around 92,000 t compared with a deficit of around 246,000 t in the same period of 2014.

The average LME cash price for June was US$5,833.61 per tonne, down from the May average of US$6,300.61 per tonne. The 2015 high and low copper prices through the end of June were US$6,448.00 (on 12th May) and US$5,390.50 per tonne (on 29th Jan), respectively, and the year-to-date average was US$5,928.73 per tonne (14 percent below 2014 annual average). As of the end of June, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 464,099 t, an increase of 157,662 t (50 percent) from stocks held at the end of December 2014. Compared with the May levels, stocks were up at LME and COMEX and down at SHFE.

The July 2015 Copper Bulletin is now available for sale upon request. Please visit the ICSG website icsg.org for further copper market related information. 

Source: International Copper Study Group (ICSG)