Global copper use down, production up in 2013: ICSG

The Lisbon-based International Copper Study Group (ICSG) released the following preliminary data for April 2013 world copper supply and demand in its July 2013 Copper Bulletin. The Bulletin is available for sale upon request. For more information visit www.icsg.org.

In developing its global market balance, ICSG uses an apparent demand calculation for China, the leading global consumer of copper, accounting for 40% of world demand. Apparent copper demand for China is based only on reported data (production + net trade +/- SHFE stock changes) and does not take into account changes in unreported stocks (State Reserve Bureau, producer, consumer and merchant/trader), which may be significant during periods of stocking or de-stocking, and which could alter supply-demand balances.

According to preliminary ICSG data, the refined copper market balance for April 2013 showed a production surplus of 50,000 tonnes, as apparent refined demand was weak in major consuming regions. When making seasonal adjustments for world-refined production and use, April showed a surplus of 106,000 tonnes. The refined copper balance for the first four months of 2013, including revisions to data previously presented, shows a production surplus of 266,000 tonnes (a seasonally adjusted surplus of 322,000 tonnes). This compares with a production deficit of 429,000 tonnes (a seasonally adjusted deficit of 377,000 tonnes) in the same period of 2012.

In the first four months of 2013, world use is estimated to have declined by around 4% compared with that in the same period of 2012. Chinese apparent demand declined by 7% owing to a 45% decline in net imports of refined copper. But anecdotal evidence suggests that the lower import level was accompanied by a decline in unreported inventories held in bonded warehouses in China, which may have been all or partially directed to domestic industrial use. (In its April 26 forecasted press release, ICSG said that unreported inventories in China were estimated to have risen by 600,000 tonnes during 2012.) Excluding China, year-on-year world use declined by 1.6%. On a regional basis, use is estimated to have declined by around 6% in Africa, 2% in the Americas, 5.5% in Asia, 0.5% in Europe and 1.5% in Oceania.

World mine production is estimated to have increased by almost 9% in the first four months of 2013 compared with production in the same period of 2012, mainly owing to a recovery in production levels from constrained output in early 2012. Concentrate production increased by 11% and solvent extraction-electrowinning by 2.4%. Mine production increased by 6% in Chile — the world’s leading producer accounting for 32% of world mine production. On a regional basis, production rose by 31% in Africa, 4.5% in the Americas, 15% in Asia, 3% in Europe and 12% in Oceania. The average world mine capacity use rate for the first four months of 2013 increased to 82% from 78% in the same period of 2012.

World refined production is estimated to have increased by 6% in the first four months of 2013 compared with refined production in the same period of 2012: primary production was up by around 5%, and secondary production (from scrap) increased by 11%. The main contributors to growth were China (14%), Democratic Republic of the Congo (40%) and Zambia (21%), with refined production declining by 6% in Chile, the world’s second-largest refined copper producer. On a regional basis, refined production is estimated to have increased in Africa (26%), Asia (10%), and Europe (2.5%), but declined in the Americas (1%) and Oceania (1%). The average world refinery capacity use rate for the first four months of 2013 increased to 80.5% from 79.5% in the same period of 2012. 

The average London Metal Exchange cash price for June 2013 was US$7,004.05 per tonne, down from the May 2013 average of US$7,229.17 per tonne. The 2013 high and low copper prices through the end of June were US$8,242.50 (on Feb. 5) and US$6,637.50 per tonne (on June 24), and the annual average was US$7,539.34 per tonne. As of the end of June, copper stocks held at the major metal exchanges (LME, Comex, SHFE) totalled 910.776 tonnes, which is an increase of 321,354 tonnes from stocks held at the end of December 2012 and an increase of 41,806 tonnes from stock levels at the end of May 2013. Compared with the May levels, stocks were up at LME and SHFE, and down at Comex.