The International Copper Study Group (ICSG) released preliminary data for February 2018 world copper supply and demand in its May 2018 Copper Bulletin.
The Bulletin and ICSG online statistical database provide detailed data, on a country basis, for copper mine, smelter, refined and semis production and copper refined usage, trade, stocks and prices. The bulletin is available for sale (single issues €100/€150, annual subscription €500/€750 for orders originating from/outside institutions based in ICSG member countries).
World mine production is estimated to have increased by around 4.8% in the first two months of 2018, with concentrate production rising by 4.5% and solvent extraction-electrowinning (SX-EW) by 6%: The increase in world mine production, of about 150,000 tonnes copper, was mainly due to:
- Constrained output in the comparative period of 2017 namely in Chile and Indonesia.
- Production in Chile, the world’s biggest copper mine producing country, increased by 13.5% mainly because production in February 2017 was constrained by a strike at Escondida (world biggest copper mine).
- Indonesian output increased by 40% because comparative output in 2017 was negatively affected by a temporary ban on concentrate exports that started in January and ended in April.
- A 10% increase in SX-EW production in the Democratic Republic of Congo (DRC) and a 16% rise in Zambian mine output due to the restart of temporary closed/reduced capacity.
- Although no major supply disruptions occurred in this period, overall growth was partially offset by lower output at some mines in Canada (-9%), Mexico (-3.5%), Peru (-2%) and the United States (-9%).
- On a regional basis, mine production is estimated to have increased by around 11% in Africa, 4% in the Americas, 5% in Asia, 2.5% in Europe and 5% in Oceania.
World refined production is estimated to have increased by about 3.3% in the first two months of 2018 with primary production (electrolytic and electrowinning) rising by 3% and secondary production (from scrap) increasing by 4.5%:
- In tonnage terms, the main contributor to growth in world refined production was China (increase of 3.5%) due to its continued expansion of capacity.
- Production in Chile was up by 5.2% supported by a 7% increase in electrowinning (SX-EW) production mainly because production in February 2017 was constrained by the strike at Escondida referred to previously.
- Production in Indonesia and Japan was also substantially higher recovering from constrained output last year that was due to a strike and a maintenance shutdown.
- Increases in electrowinning (SX-EW) output in the DRC and Zambia also contributed to world refined production growth.
- However, overall growth was partially offset by declines in refined production in Peru, Poland and in the United States, respectively.
- On a regional basis, refined output is estimated to have increased in Africa (7%) and Asia (5%) while remaining essentially unchanged in Europe and in the Americas.
World apparent refined usage is estimated to have increased by about 3.9% in the first two months of 2018:
- China was the biggest contributor to growth with apparent usage (excluding changes in unreported stocks) increasing by around 9.2%, driven by an 8% increase in net refined copper imports and 3.5% increase in refined production.
- Preliminary data indicates that world ex-China usage declined by 1%.
- Among other major copper using countries, usage increased in India and the EU but declined in Japan, the United States and South Korea.
World refined copper balance for the first two months of 2018 indicates a surplus of about 110,000 tonnes:
- In developing its global market balance, ICSG uses an apparent demand calculation for China that does not take into account changes in unreported stocks [State Reserve Bureau (SRB), producer, consumer, merchant/trader, bonded]. To facilitate global market analysis, however, an additional line item—Refined World Balance Adjusted for Chinese Bonded Stock Changes – is included in the table below that adjusts the world refined copper balance based on an average estimate of changes in unreported inventories provided by three consultants with expertise in China’s copper market.
- In the first two months of 2018, the world refined copper balance adjusted for changes in Chinese bonded stocks indicated a market surplus of around 105,000 tonnes.
Copper Prices and Stocks
Based on the average of stock estimates provided by independent consultants, China’s bonded stocks are estimated to have declined by around 3,000 tonnes in the first two months of 2018 from the year-end 2017 level. Bonded stocks increased by around 105,000 tonnes in the same period of last year. As of the end of April, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 800.015 tonnes, an increase of 257.486 tonnes (47%) from stocks held at the end of December 2017. Stocks were up at the LME (62%), at SHFE (66%) and COMEX (17%). The average LME cash price for April was US$ 6838.25 per tonne, up 0.6% from the March average of US$ 6795.76 per tonne. The 2018 high and low copper prices through the end of April were US$ 7,202.50 per tonne (on 4th Jan) and US$ 6,500 per tonne (on 26th Mar), respectively, and the year average was US$ 6931.07 per tonne (12% above 2017 annual average).
For further copper market related information, please visit the ICSG website.
Source: International Copper Study Group (ICSG)