Lisbon, Portugal — According to preliminary data by International Copper Study Group (ICSG), the refined copper market balance for January 2014 (excluding the adjustment for changes in China`s bonded stocks) showed an apparent production deficit of 53,000 metric tonnes (t), mainly due to strong Chinese apparent demand. When making seasonal adjustments for world refined production and usage, January showed a production deficit of 74,000 t. This compares with a production surplus of 70,000 t (a seasonally adjusted surplus of 47,000 t) in January 2013.
In January 2014, world usage is estimated to have increased by around 11 percent compared with that in January 2013. Chinese apparent demand increased by 28 percent based on a 70 percent increase in net imports of refined copper from the low net import level in January 2013 and subsequent lower apparent usage. Excluding China, world usage declined by around 1 percent. On a regional basis, usage is estimated to have declined by 1 percent in the Americas and Europe, respectively, and to have increased by 15 percent in Africa and 19 percent in Asia (by only 1 percent when excluding China).
World mine production is estimated to have increased by around 4.5 percent in January 2014 compared with production in January 2013. Concentrate production increased by 5 percent while solvent extraction-electrowinning (SX-EW) increased by 3 percent. With the exception of Chile (-3 percent) all the other major copper mine producing countries had greater output. On a regional basis, production in January rose by 20 percent in Africa, 2.5 percent in the Americas, 6 percent in Asia, and 0.5 percent in Europe, but declined by 0.5 percent in Oceania. The average world mine capacity utilization rate for January 2014 remained essentially unchanged from that of January 2013.
World refined production is estimated to have increased by 4 percent in January 2014 compared with refined production in the same month of 2013: primary production was up by 4.3 percent and secondary production (from scrap) was up by 3 percent. The main contributor to growth was China (+13 percent), as refined production in the rest of the world increased by only 0.7 percent. The average world refinery capacity utilization rate for January 2014 declined slightly to 77.7 percent from 78.5 percent in January 2013.
Based on the average of stock estimates provided by consultants, Chinese bonded stocks increased by around 30,000 t in January 2014 from the yearend 2013 level, about one half the estimated increase during January 2013. In January 2014, the refined copper balance adjusted for Chinese bonded stock changes indicates a deficit of around 20,000 t compared to a surplus of around 130,000 t in January 2013.
The average LME cash price for March 2014 was US$ 6,667.83 per tonne, down from the February 2014 average of US$ 7,152.15 per tonne. The 2014 high and low copper prices through the end of March were US$ 7,439.50 (on 2nd Jan) and US$ 6,434.50 per tonne (on 20st Mar), respectively, and the annual average was US$ 7,040.56 per tonne. As of the end of March, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 475,089 t, a decline of 31,415 t from stocks held at the end of December 2013. Compared with the February 2014 levels, stocks were down at the LME and SHFE and up at COMEX.
Please visit the ICSG website www.icsg.org for further copper market related information. The April 2014 Copper Bulletin is available for sale upon request.
Source: International Copper Study Group (ICSG)