Facts ‘n’ Figures: World copper mine production soars 5% in 2016, ICSG finds

The following is an abridged summary by the International Copper Study Group (ICSG) of world copper supply and demand data for 2016. The full suite of data is available in the ICSG’s March 2017 Copper Bulletin, for sale at www.icsg.org.

In 2016 world mine production is estimated to have increased by around 5%, or 1 million tonnes, with concentrate production increasing by 7% and solvent extraction-electrowinning (SX-EW) declining by 2%.

This 5% increase was mainly due to: a 38% (650,000 tonnes copper) rise in Peruvian concentrate output that benefitted from new and expanded capacity brought on stream in the last two years; a recovery in production levels in Canada, Indonesia and the U.S., and expanded capacity in Mexico; low frequency of supply disruptions due to strikes, accidents or adverse weather conditions.

However overall growth was partially offset by a 3.8% (220,000 tonnes) decline in production in Chile, the world’s biggest copper mine producer, and a 4.5% decline in the Democratic republic of the Congo (DRC) where output is being constrained by temporary production cuts.

On a regional basis, production rose by 6% in the Americas and 11.5% in Asia but declined by 3.5% in Africa while remaining essentially unchanged in Europe and Oceania.

Refined copper

World refined production is estimated to have increased by about 2.5% (530,000 tonnes) in 2016 with primary production (electrolytic and electrowinning) increasing by 3% and secondary production (from scrap) declining by 2%.

Increased availability of concentrates allowed world primary electrolytic refined production to increase by 4.5%.

The main contributor to growth in world refined production was China (increase of 6%, or 470,000 tonnes), followed by the U.S. and Japan where production increased by 7% and 5% respectively and by Mexico (16%) where expanded SX-EW capacity contributed to refined production growth.

However, overall growth was partially offset by a 3% decline in Chile, the world’s second largest refined copper producer.

Although primary electrolytic refined production increased by 4.5%, electrowinning production declined by 6.5% due to definitive/temporary closures of SX-EW mines.

Production in the DRC and Zambia also declined by an aggregated 11% mainly due to the impact of temporary production cuts.

On a regional basis, refined output is estimated to have increased in the Americas (1%) and Asia (6%) while declining in Africa (10%) and in Europe (including Russia) (2%) and remaining essentially unchanged in Oceania.

World apparent refined usage is estimated to have increased by around 2% (430,000 tonnes) in 2016. Growth was mainly due to an increase in Chinese apparent demand as world usage excluding China is estimated to have increased by only 0.9%.

Chinese apparent demand (excluding changes in unreported stocks) increased by around 2.5% based mainly on 6% growth in refined production as in fact net imports of refined copper declined by 7.5%.

Usage in the U.S. and Japan, the second and third leading refined copper using countries, is down by 2% and 2.5% respectively.

On a regional basis, usage is estimated to have increased by 3% in Asia (when excluding China, Asia usage increased by 3%) and by 2% in Europe (by 1.5% in the EU), while declining by 3% in the Americas.

World refined copper balance for 2016 indicates a deficit of around 50,000 tonnes, mainly because of a 2.5% increase in Chinese apparent demand.

The refined copper market balance for the month of December 2016 showed a small surplus of around 20,000 tonnes.

Based on the average of stock estimates provided by independent consultants, China’s bonded stocks increased by 15,000 tonnes in 2016 from the year-end 2015 level. (They had decreased by 100,000 tonnes in 2015.)

The average LME cash price for copper for February 2017 was US$5,941.55 per tonne, up from the January average of US$5,737.43 per tonne.

The 2017 high and low copper prices through the end of February were US$6,145.00 (on Feb. 14) and US$5,500.50 per tonne (on Jan. 4), respectively, and the year average was US$5,837 per tonne (20% above 2016 annual average).

As of the end of February, copper stocks held at the major metal exchanges (LME, Comex, SHFE) totalled 605,146 tonnes, an increase of 66,073 tonnes (12%) from stocks held at the end of December 2016. Compared with the December 2016 levels, stocks were down at the LME (-36%) and up at SHFE (98%) and Comex (42%).