ICSG: China, Russia boost copper use for 2011

The following is a summary of the International Copper Study Group’s (ICSG) preliminary data for 2011 world copper supply and demand. The full report is included in the ICSG’s March 2012 Copper Bulletin, which can be purchased at www.icsg.org.

 According to preliminary ICSG data, the refined copper market balance for December 2011 showed a 41,000-tonne production surplus despite record-high Chinese apparent use*, or 831,000 tonnes, with weak use in the other major consuming regions owing to the year-end holiday period.

The apparent world-refined copper balance for 2011, including revisions to data previously presented, indicates a production deficit of 358,000 tonnes, which is nearly equal to the deficit of 377,000 tonnes in 2010. 

In 2011, global refined copper use grew by 3%, or 610,000 tonnes, to 20 million tonnes, mostly owing to increases in Chinese and Russian apparent 7% and 60% respective use. Russia’s apparent use reflected a 56% decline in net refined exports and a commensurate 80% increase in their net exports of semi-fabricates. Growth in the U.S. and the European Union  weakened as the year progressed, and in 2011, use grew by only 0.1% in the U.S. and declined by 1.3% in the EU. Japanese use, affected by the earthquake and tsunami, was down by 5% in 2011. On a regional basis, use increased in Africa by 1%, in Asia by 3.5% and in Europe by 5.5%. Use decreased in the Americas by 1% and in Oceania by 7%. 

In 2011, world mine production underperformed relative to capacity and remained at the same levels of 2010 at 16 million tonnes, concentrate production declined by 1% to 12.6 million tonnes and solvent extraction electrowinning rose by 3.5% to 3.4 million tonnes. Operational failures, labour unrest and lower ore grades resulted in production levels not keeping pace with capacity growth. According to ICSG production and production capacity data, the average global mine capacity rate of use fell to 79% in 2011, its lowest level in at least 20 years. Production in Chile, the biggest producer, declined by 3.2% and was 5.5% below that in 2007. Output from such major producers as the U.S., Peru, Australia and Indonesia represent 25% of worldwide copper mine production, and decreased by an aggregate 6%. Production in China, the second-leading copper mine producer, increased by 12% in 2011. On a regional basis, copper mine production increased in Africa by 7%; the Americas, 0.2%; Europe, 3%; and Oceania, 6.7%; and declined in Asia by 6%. 

World refined production rose by 3% in 2011 compared with refined production in 2009. Primary production was up 2.3%, and secondary production from scrap was up 8.2%. Production increases of 13% in Australia — recovery from 2010 operational constraints — 14% in China and 40% in the Democratic Republic of the Congo were partially offset by 4.7% declines in Chile, 5.7% in the U.S., 14% in Canada and 14% in Japan. The refined 79.7% production capacity use rate in 2011 remained unchanged from 2010.

The average London Metal Exchange (LME) cash price for February 2012 was US$8,422.69 per tonne, up from January’s average of US$8,043.45. The 2012 high and low copper prices through the end of February were US$8,658 and US$7,471 per tonne, respectively, and the average was US$8,233.07. As of the end of February, copper stocks held at the major metal exchanges — the LME, Comex and the Shanghai Futures Exchange (SHFE) — totalled 591,459 tonnes, up 23,277 tonnes from stocks held at the end of December 2011, and up 49,720 tonnes compared to January 2012. 

*China’s apparent copper use is based on reported data (production + net trade +/- SHFE stock changes +/- industry stock changes, if reported) and does not take into account changes in unreported stocks. 

World refined copper usage and supply trends, 2006-2011

Unless otherwise stated, figures represent thousands of tonnes, copper. Due to the nature of statistical reporting, the
published data should be considered as preliminary as some figures are based on estimates and could change.
¹ Based on EU apparent usage. ² Surplus/deficit is calculated using refined production minus refined usage. ³ Surplus/
deficit is calculated using seasonally adjusted refined production minus seasonally adjusted refined usage. Source: ICSG