Refined copper market in production deficit during Jan- May 2016, says ICSG

By Paul Ploumis (ScrapMonster Author)

August 23, 2016 08:10:19 PM

SPOKANE (Scrap Monster): The International Copper Study Group (ICSG) has released preliminary data for the month of May this year in its August 2016 Copper Bulletin. According to preliminary ICSG data, copper production and usage data indicates that the refined copper market ended in a production deficit of around 222,000 metric tonnes.

The refined copper market balance for the month of May ‘16 showed an apparent production deficit of nearly 65,000 metric tonnes. The production deficit for the month, after making seasonal adjustments for global refined copper production and usage, stood at 24,000 metric tonnes. The refined copper balance for the first five-month period of the year ended in production surplus of around 222,000 metric tonnes as compared with a deficit of around 39,000 tonnes during the same period in 2015. It should be noted that the seasonally adjusted refined copper market balance had recorded a marginal surplus of nearly 10,000 metric tonnes during the first five months in 2015.

World refined production increased by nearly 3.5% (nearly 330,000 t) during the first five months of 2016 in comparison with the corresponding five-month period from January to May last year. Primary production was up 3%, whereas the secondary production was up by 5%. The refined copper production during the month witnessed significant growth of 7% in China. The production by the US witnessed an increase of 18%. The output by Chile and Japan witnessed rise of around 3.5% each. The other regions to report rise in refined output were the Americas (8%), Asia (6%) and Oceania (17%). On the other hand, the refined copper output by African region declined by 15.5%. The declined output from the region was mainly on account of temporary production cuts in some regions of the DRC and Zambia. The output by European region too witnessed decline of 3.5%.The capacity utilization rate of refineries increased marginally from 82.2% in Jan-May ’15 to 83.5% during the first five months of the current year.

The world copper mine production has increased by around 4.0% (nearly 345,000 t) during the initial five-month period of 2016. Concentrate production was up by 5.5% during the period. The mine output from Peru reported significant improvement of 52%, primarily due to new and expanded capacities that has come online during the past two years. The recovery in production by Canada, the US and Mongolia and expanded capacity in Mexico also contributed to the sharp recovery in production levels. On the other hand, production declined by 5% in Chile during the month. The mine output from the DRC too dropped sharply by 11% year-on-year. Region-wise, Asia recorded 5% rise in production. Also Americas recorded 7.0% rise in output. On the other hand, the Africa region recorded production decline of 4%. The mine output by the Europe and Oceania regions remained flat during Jan-May ‘16. The mine capacity utilization rates remained essentially unchanged during the first five-month period this year when compared with the corresponding five months in 2015.

Meantime, global usage of the metal is estimated to have increased by around 5% during January to May this year in comparison with the year before. The Chinese apparent demand increased sharply by 12%. The usage by world countries excluding China remained more or less unchanged. The European demand rose by 6%, whereas it declined by 20% and 4% in Africa and the Americas.

The table given below provides World Refined Copper Supply Trends for the first five months of the current year:

Note: The above figures are in thousand metric tonnes