ICSG announces refined copper balance surplus for Jan. to Nov. 2015

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

Lisbon, Portugal – According to preliminary data by the International Copper Study Group (ICSG), the refined copper market for November 2015 showed a small apparent production deficit of around 25,000 metric tonnes (t). When making seasonal adjustments for world refined production and usage, November showed a small production surplus of 20,000 t. The refined copper balance for the first eleven months of 2015, including revisions to data previously presented, indicates a production surplus of around 50,000 t (and a seasonally adjusted surplus of about 170,000 t). This compares with a production deficit of around 545,000 t (a seasonally adjusted deficit of about 430,000 t) for the same period of 2014.

In the first eleven months of 2015, world apparent usage is estimated to have declined by around 1 percent (260,000 t) compared with that in the same period of 2014. Excluding China, world usage declined by around 4 percent. Although Chinese apparent demand increased by around 2 percent, usage declined by 4 percent and 7 percent in the EU and Japan, respectively, and by 48 percent in Russia (following the withdrawal of Russia’s cathode export tax in September 2014). On a regional basis, usage is estimated to have increased by around 1.5 percent in Africa and Asia, respectively while declining by around 1.5 percent in the Americas, 10 percent in Europe and 55 percent in Oceania.

World mine production is estimated to have increased by around 3.5 percent (580,000 t) in the first eleven months of 2015 compared with production in the same period of 2014. Concentrate production increased by 4 percent while solvent extraction-electrowinning (SX-EW) increased by 1 percent. The increase in world mine production was mainly due to a recovery in production levels at operating mines in Indonesia (56 percent growth in Indonesian mine production as in 2014 output was constrained by a seven month ban on concentrates exports) and an 19 percent increase in Peruvian output (benefitting from higher production rates at operating mines and a ramp-up in production from mines that started in 2014/2015). Production increased by 0.8 percent and 2 percent in Chile and in the United States, respectively, while declining by 4 percent in China. On a regional basis, production rose by 4 percent in South America, 2 percent in North America, 8 percent in Asia and 1.5 percent in Europe. However, production declined by 1 percent and 3.5 percent in Africa and Oceania, respectively. The average world mine capacity utilization rate for the first eleven months of 2015 declined to around 84 percent from 85 percent in the same period of 2014.

World refined production is estimated to have increased by about 1.6 percent (330,000 t) in the first eleven 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) remained essentially unchanged. The main contributor to growth in world refined production was China (up by 4 percent). Output in Chile and Japan (the second and third leading refined copper producers) declined by 1.5 percent and 4 percent, respectively, while in the United States (the fourth largest refined copper producer), production increased by 1.5 percent. On a regional basis, refined output is estimated to have increased in Africa (3 percent) and Asia (3 percent) and decreased in Oceania (-5 percent) while remaining essentially unchanged in the Americas and Europe. The average world refinery capacity utilization rate for the first eleven months of 2015 remained practically unchanged at around 83 percent as compared to the same period of 2014.

Based on the average of stock estimates provided by independent consultants, China’s bonded stocks declined by around 155,000 t in the first eleven months of 2015 from the year-end 2014 level. Stocks declined by 25,000 t in the same period of 2014. In the first eleven months of 2015, the world refined copper balance adjusted for the change in Chinese bonded stocks indicates a production deficit of around 100,000 t compared with a deficit of around 570,000 t in the same period of 2014.

The average LME cash price for January was US-$ 4,462.75 per tonne, down from the December average of US-$ 4,629.00 per tonne. The 2016 high and low copper prices through the end of January were US-$ 4,647.00 (on 5th Jan) and US-$ 4,310.50 per tonne (on 15th Jan), respectively, and the year-to-date average was US-$ 4,462.75 per tonne (19 percent below 2015 annual average). As of the end of January, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 510,729 t, an increase of 28,861 t (6 percent) from stocks held at the end of December 2015. Compared with the December 2015 levels, stocks were up at the LME and SHFE and down at COMEX.

The ICSG website can be visited for further copper market related information. The February 2016 Copper Bulletin is available for sale upon request.

Source: International Copper Study Group (ICSG)