By Paul Ploumis 08 Oct 2015 Last updated at 08:48:05 GMT
ICSG forecasts copper market to end in supply deficit of 130,000 mt in 2016, as against its earlier forecast of 230,000 supply surplus predicted in April 2015.
SPOKANE (Scrap Monster): The International Copper Study Group (ICSG) has revised the copper forecast for 2016. It now anticipates the metal market to turn into deficit during the next ye3ar. According to the latest report released Tuesday, the world copper body stated that copper will end in a supply deficit of 130,000 mt during 2016.
ICSG in its earlier forecast during April this year had stated that copper market is likely to see supply surplus of 230,000 mt in 2016. However, in the wake of ongoing production cutbacks and mine disruptions at various mines across the world, the supply is expected to fall to a deficit of nearly 130,000 mt during next year. ICSG has also reduced its copper surplus forecast for 2015 from earlier 360,000 mt to just over 41,000 mt.
According to ICSG, the changes in copper market conditions since April this year have forced them to revise the earlier forecast. The economic slowdown in China has affected copper consumption levels. As a result, the global usage levels have been revised downward. The lower-than-anticipated demand growth from key Chinese market has led to adjustment of production cycles by mining majors. Incidentally, China accounts for almost 40% of the global demand for copper. Also, the recent announcements of production cuts are likely to impact copper supply.
Major copper producers have implemented mining controls, following the sharp decline in prices. The LME copper prices have fallen nearly 16% till date from the start of the year. The growth in copper production in 2015 will be just 1% when compared with 7% year-on-year growth witnessed in 2014. The refined copper production is expected to grow by 7% in China. However, this growth will be offset by sharp decline in refined copper output in other copper producing nations such as Chile, Japan and the United States.
