Lisbon, Portugal – According to preliminary data of the International Copper Study Group (ICSG), the refined copper market balance for May 2015 showed a second consecutive monthly apparent production deficit, at over 60,000 metric tonnes (t), mainly due to strong Chinese apparent demand. When making seasonal adjustments for world refined production and usage, May showed a production deficit of around 30,000 t. The refined copper balance for the first five months of 2015, including revisions to data previously presented, indicates a roughly balanced market (and a seasonally adjusted surplus of 37,000 t). This compares with a production deficit of 537,000 t (a seasonally adjusted deficit of 518,000 t) for the same period of 2014.
In the first five months of 2015, world apparent usage is estimated to have declined by around 3 percent (280,000 t) compared with that in the same period of 2014. Chinese apparent demand declined by 3 percent (143,000 t) based on a 13 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 May was the highest since December 2014. Excluding China, world usage declined by around 3 percent in the first five months of 2015 mainly due to a decline of 45 percent in Russia’s apparent usage (following the withdrawal of Russia’s cathode export tax in September 2014) and a decline of 8 percent and 6 percent in Japan and the EU, respectively. On a regional basis, usage is estimated to have declined by 2 percent in Asia (when excluding China, Asia usage increased by 1 percent), by 11 percent in Europe and by 72 percent in Oceania. Usage increased by 5.6 percent and 3.8 percent in Africa and the Americas, respectively.
World mine production is estimated to have increased by 3.6 percent (277,000 t) in the first five months of 2015 compared with production in the same period of 2014. Both concentrate production and solvent extraction-electrowinning (SX-EW) increased by around 4 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 6 percent and in the United States production declined by 4 percent. On a regional basis, production rose by 2.2 percent in Africa, 3 percent in South America, 12 percent in Asia and 1 percent in Europe, but declined by 3 percent respectively in North America and Oceania. The average world mine capacity utilization rate for the first five 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 3 percent (261,000 t) in the first five months of 2015 compared with refined production in the same period of 2014: primary production was up by almost 2 percent and secondary production (from scrap) was up by 8.2 percent. The main contributor to growth was China (up by 5 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 (+12 percent). Output in Chile and Japan (the second and third leading refined copper producers) declined by 3 percent each, while in the United States (the fourth largest producer of refined copper), production dropped by 6 percent. On a regional basis, refined output is estimated to have increased in Africa (7 percent) and Asia (6 percent) and decreased in the Americas (-1 percent) and Oceania (-23 percent) while remaining essentially unchanged in Europe. The average world refinery capacity utilization rate for the first five months of 2015 remained largely unchanged compared to the same period of 2014.
Based on the average of stock estimates provided by independent consultants, China’s bonded stocks increased by 45,000 t in the first five months of 2015 from the year-end 2014 level. Stocks increased by almost 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 50,000 t compared with a deficit of around 350,000 t in the same period of 2014.
The average LME cash price for July was US$5,456.91 per tonne, down from the June average of US$5,833.61 per tonne. The 2015 high and low copper prices through the end of July were US$6,448.00 (on 12th May) and US$5,190.50 per tonne (on 27th Jul), respectively, and the year-to-date average was US$5,854.91 per tonne (15 percent below 2014 annual average). As of the end of July, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 483,465 t, an increase of 177,028 t (58 percent) from stocks held at the end of December 2014. Compared with the June levels, stocks were up at LME and COMEX and down at SHFE.
The August 2015 Copper Bulletin is available for sale upon request. Please visit the ICSG website icsg.org for further copper market related information.
Source: International Copper Study Group (ICSG)