The global refined copper market for June showed an apparent production deficit of around 83,000 mt, mainly due to strong Chinese apparent refined copper demand, the International Copper Study Group said Tuesday.
When making seasonal adjustments for world refined production and usage, June showed a production deficit of about 47,000 mt, the ICSG said in its monthly report.
The refined copper balance for the first half of 2016, including revisions to previous data, indicates a production deficit of around 306,000 mt, and a seasonally adjusted deficit of about 227,000 mt.
That compares with a production deficit of around 54,000 mt (a seasonally adjusted surplus of about 27,000 mt) for the same period of 2015.
For the first half of 2016, world apparent refined usage is estimated to have increased by around 5% (570,000 mt) compared with the same period of 2015, mainly due to strong Chinese apparent demand, the ICSG said.
Factoring in estimated changes in Chinese bonded warehouse stocks, the world refined copper balance indicates a production deficit of around 151,000 mt for the first half compared with a surplus of about 16,000 mt for H1 2015.
“Chinese apparent demand increased by around 11% based on a 20% increase in net imports of refined copper from the lower net import level in early 2015 and consequently lower apparent demand,” ICSG analysts said. Excluding China, world usage remained essentially unchanged.
On a regional basis, refined usage is estimated to have increased by 5% in Europe and 7% in Asia (when excluding China, Asia usage declined by 2%) in H1 2016, while declining by 17% and 4% in Africa and in the Americas, respectively, and remaining essentially unchanged in Oceania.
World mine production is estimated to have increased by around 4.5% (430,000 mt) in the first half of 2016 compared with production in the same period of 2015, the ICSG said.
Concentrate production increased by 6% while solvent extraction-electrowinning (SX-EW) declined by 1%.
“The increase in world mine production was mainly due to a 50% rise in Peruvian output that is benefiting from new and expanded capacity brought on stream in the last two years,” ICSG analysts said.
A recovery in production levels in Canada and the US, expanded capacity in Mexico and a ramp-up in production in Mongolia also contributed to world growth.
But overall growth was partially offset by a 5.5% decline in production in Chile, the world?s biggest copper mine producer, and a 10% decline in Democratic Republic of Congo output due to temporary production cuts.
On a regional basis, production rose by 7% in the Americas and 6% in Asia during the first half, but declined by 4% in Africa while remaining essentially unchanged in Europe and Oceania, according to ICSG data.
World refined production is estimated to have increased by about 3% (320,000 mt) in the first half of 2016 compared with refined production in the same period of 2015: primary production was up by 2.5% and secondary production (from scrap) was up by 4.5%.
The main contributor to growth was China (+6%), followed by the US, where production increased by 16%. Output in Chile and Japan, the second and third leading refined copper producers, increased by around 2% and 3% respectively.
Refined production in the DRC and Zambia declined due to the impact of temporary production cuts, the ICSG said.
On a regional basis, refined output is estimated to have increased in the Americas (6%), Asia (5%) and Oceania (18%) in the first half, while declining in Africa (-15%) and in Europe (-4%).
Source: S&P Global Platts