ICSG: Refined copper balance for 2013 shows production deficit of 193,000 t

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Kupferschrott (Foto: Aurubis AG)

Lisbon, Portugal — According to preliminary data by the International Copper Study Group (ICSG), the refined copper market balance for December 2013 showed an apparent production surplus of 34,000 metric tonnes (t) as, despite strong Chinese apparent demand, refined usage was weak in major consuming regions during the yearend holiday period. When making seasonal adjustments for world refined production and usage, December showed a production deficit of 57,000 t. The refined copper balance for the full-year 2013, including revisions to data previously presented (including a major revision to India’s refined usage series), indicates a production deficit of 193,000 t (a seasonally adjusted deficit of 337,000 t). This compares with a production deficit of 266,000 t (a seasonally adjusted deficit of 419,000 t) in the same period of 2012.

In 2013 world apparent usage is estimated to have increased by 4% (805,000 t) to 21.2 Million metric tonnes (Mt) compared with that in 2012. Chinese apparent demand increased by 7% from that in 2012: a decline in net imports of refined copper of 216,000 t (that occurred mainly in the 1st half of the year) was more than offset by an increase in refined production of around 675,000 t. Actual demand in China in 2013 may have exceeded apparent demand as the lower net imports level was accompanied by a decline in unreported inventories held in bonded warehouses in China. Withdrawn stocks may have been all or partially directed to domestic industrial use. Excluding China, year-on-year world usage increased by 1.4% (160,000 t), with growth in the United States (3.6%), Brazil (3%) and Russia (3%) offsetting declines in South Korea (5%) and the European Union (1%). Japanese and Indian usage remained unchanged. On a regional basis, usage is estimated to have increased by around 5.5% in Asia, 1.5% in Asia Ex-China, 3% in Africa, 3% in the Americas, and 0.5% in Europe and to have declined by around 14% in Oceania.

World mine production is estimated to have increased by 8% (1.3 million tons) to 18 Mt in 2013 compared with that in 2012, mainly owing to a recovery in production levels from constrained output in 2012 (3 major world copper mines recovered from production constraints during 2012, accounting for 28% of the world increase in 2013) and, to a lesser extent, to the ramp-up of new mine capacity. Concentrate production increased by 9% (1.2 million tons) and solvent extraction-electrowinning (SX-EW) by 3.5% (130,000 t). Mine production increased by 6% in Chile (342,000 t), the world’s leading producer, and accounted for 32% of world mine production in 2013. Production also increased in Peru (6%), the United States (5%), Indonesia (28%), Mongolia (61%), the Democratic Republic of Congo (50%) and Zambia (7%). These seven countries combined contributed an additional 1 Mt of copper mine supply. On a regional basis, production rose by around 26% in Africa, 6% in the Americas, 10% in Asia, 2.5% in Europe, and 5% in Oceania. The average world mine capacity utilization rate for 2013 increased to around 85% from around 82% in 2012.

World refined production is estimated to have increased by around 4.5% (879,000 t) to 21 Mt in 2013 compared with refined production in 2012: primary production was up by around 4% (638,000 t), and secondary production (from scrap) increased by 6.5% (241,000 t). The main contributor to growth was China, where production increased by 11.5% (675,000 t). Production also increased in Brazil (38%), the Democratic Republic of Congo (40%), and Zambia (10%). However, due to smelter maintenance and other temporary shutdowns, refined production declined by 5% in Chile, the world’s second largest refined copper producer, 11% in India, 3% in Japan, and 4% in Scandinavia. On a regional basis, refined production is estimated to have increased in Africa (24%), Asia (6.5%), Oceania (2.5%), and the Americas (1%) and to have declined in Europe (2%). The average world refinery capacity utilization rate for 2013 declined slightly to 78.5% from 79.2% in 2012.

Based on the average of stock estimates referred to above, Chinese bonded stocks declined by around 260,000 t in 2013 compared to an increase of around 570,000t in 2012. In 2013, the refined copper balance adjusted for Chinese bonded stock changes indicates a deficit of around 450,000 t compared to a surplus of around 300,000 t in 2012.

The average LME cash price for February 2014 was US-$7,152.15 per tonne, down from the January 2014 average of US-$7,294.89 per tonne. The 2014 high and low copper prices through the end of February were US-$7,439.50 (on 2 Jan) and US-$7,091 per tonne (on 31 Jan), respectively, and the annual average was US-$7,226.92 per tonne. As of the end of February, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 484,339 t, a decline of 22,165 t from stocks held at the end of December 2013. Compared with the January 2014 levels, stocks were down at the LME and Comex and up at SHFE.

Please visit the ICSG website for further copper market related information.

Source: International Copper Study Group (ICSG)