ICSG: Refined copper market balance for Oct. 2013 shows production deficit

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Foto: O. Kürth

Lisbon, Portugal — According to preliminary ICSG data of the International Copper Study Group (ICSG), the refined copper market balance for October 2013 showed an apparent production deficit of 19,000 metric tonnes (t) mainly due to record-high Chinese apparent demand. When making seasonal adjustments for world refined production and usage, October showed a production deficit of 62,000 t. The refined copper balance for the first ten months of 2013, including revisions to data previously presented, indicates a production deficit of 230,000 t (a seasonally adjusted deficit of 169,000 t). This compares with a production deficit of 590,000 t (a seasonally adjusted deficit of 504,000 t) in the same period of 2012.

In the first ten months of 2013, world apparent usage is estimated to have increased by 3.8 percent (660,000 t), compared with that in the same period of 2012. Chinese apparent demand in the first ten months increased by 8.2 percent from that in the same period of 2012: a decline in net imports of refined copper of 366,000 t (that occurred mainly in the 1st half of the year) was more than offset by an increase in refined production of around 842,000 t. Actual demand in China during the first ten months of 2013 may have exceeded apparent demand as the lower import level in the 1st half of 2013 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 Withdrawn stocks may have been all or partially directed to domestic industrial use.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 0.6 percent, with growth in the United States, the Gulf countries, Brazil and Russia offsetting declines in Japan, South Korea and the European Union. On a regional basis, usage is estimated to have declined by around 1 percent in Asia Ex-China, and 10 percent in Oceania; increased by 2 percent in Africa, 3 percent in the Americas and 5 percent in Asia; and to have remained unchanged in Europe.

World mine production is estimated to have increased by 8.4 percent (1.14million tons) in the first ten months of 2013 compared with that in the same period of 2012, mainly owing to a recovery in production levels from constrained output in early 2012, but also to the ramp- up of new mine capacity . Concentrate production increased by 10 percent (1.06 million tons) and solvent extraction-electrowinning (SX- EW) by 2.7 percent (82,000 t). Mine production increased by around 7 percent in Chile (300,000 t), the world’s leading producer, and accounted for 32 percent of world mine production. Production also increased in Peru (6 percent), the United States (8 percent), Indonesia (22 percent), Mongolia (50 percent), the Democratic Republic of Congo (49 percent) and Zambia (12 percent). These seven countries combined contributed an additional 858,000 t of copper mine supply. On a regional basis, production rose by around 27 percent in Africa, 7 percent in the Americas, 10 percent in Asia, 2 percent in Europe, and 5 percent in Oceania. The average world mine capacity utilization rate for the first ten months of 2013 increased to around 84 percent from around 81 percent in the same period of 2012.

World refined production is estimated to have increased by around 6.2 percent (1.02 million tons) in the first ten months of 2013 compared with refined production in the same period of 2012: primary production was up by around 5 percent (678,000 t), and secondary production (from scrap) increased by 11.5 percent (342,000 t). The main contributor to growth was China, where production increased by 18 percent (842,000 t). Production also increased in Brazil (55 percent), the Democratic Republic of Congo (39 percent), and Zambia (13 percent). However, due to smelter maintenance and other temporary shutdowns, refined production declined by 6 percent in Chile, the world’s second largest refined copper producer, 16 percent in India, 3 percent in Japan, and 4 percent in Scandinavia. On a regional basis, refined production is estimated to have increased in Africa (24 percent), Asia (10 percent), and the Americas (1 percent) and to have declined in Europe (1 percent) and in Oceania (0.5 percent). The average world refinery capacity utilization rate for the first ten months of 2013 improved slightly to 79.3 percent from 78.6 percent for the same period in the previous year.

Based on the average of stock estimates referred to above, Chinese bonded stocks declined by 326,000 t in the first 10 months of 2013 compared to an increase of 471,000t in the same period of 2012. In the first ten months of 2013, the refined copper balance adjusted for Chinese bonded stock changes indicates a deficit of 556,000 t compared to a deficit of 119,000 t in the same period of 2012.

The average LME cash price for December 2013 was US$7,202.95 per tonne, up from the November 2013 average of US$7,065.71 per tonne. The 2013 high and low copper prices were US$8,242.50 (on 5 Feb) and US$6,637.50 per tonne (on 24 June), respectively, and the annual average was US$7,321.94 per tonne. As of the end of December, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 506,504 t, a decline of 82,918 t from stocks held at the end of December 2012 and a decline of 79,871 t from stock levels at the end of November 2013. Compared with the November levels, stocks were down at all three exchanges.

The ICSG January 2014 Copper Bulletin is available for sale upon request. Please visit the ICSG website icsg.org for further copper market related information.

 Quelle: International Copper Study Group (ICSG)