ICSG: Global Copper Deficit Estimated at 390K Tons in 2018

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The International Copper Study Group (ICSG) recently released its copper report covering 2018, which estimated a global refined copper deficit of 390,000 tons in 2018.
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According to the ICSG report, world mine production increased by an estimated 2.3% in 2018.
“The increase in world mine production of about 460,000 t copper was principally due to constrained output in 2017 (mainly in Chile, Indonesia and the DRC) and to an unusually low rate of overall supply disruptions in 2018,” the report stated. “Besides the restart of Katanga’s 300,000 tpy copper mine in the DRC no major new copper mine started in 2018.”
Similarly, production in Chile also increased after a 2017 strike impacted the country’s Escondida mine. Mine output in Canada and the U.S., however, was down 10% and 3%, respectively.
In addition, refined production is estimated to have increased 1.5% in 2018, according to the report.
Despite growth overall being constrained by an “unusually high frequency of smelter disruptions and temporary shutdowns for technical upgrades/modernizations,” China led the way with an expansion of capacity. Chilean production was up 1.3% after a down 2017 — in which the sector saw several smelter shutdowns — but was down 6% from 2016.
Japanese refined output rose 7% in 2018, while increased electrowinning output in the DRC and Zambia also contributed to global refined growth.
In terms of negative impacts, Vedanta’s Tuticorin smelter loomed large, seeing to a 34% decline in Indian production. The Sterlite copper smelter in Tuticonin was ordered shuttered last year after police fired on locals protesting the state of pollution from the plant; the incident ultimately left 13 dead, according to media reports.
In addition to India, Germany, the Philippines and Poland saw a decline in refined production.
On the usage side, China’s apparent usage increased 5%, powered by a 20% increase in net imports that is possibly due to a shortage of scrap in China, according to the report.
As for dollars and cents, the average LME cash price for copper in February was $6,278.20 per ton, up 5.8% from January’s average of $5,932.02 per ton.
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For the year through the end of February, the LME cash price high was $6,546 per ton (reached Feb. 25), with a low of $5,811 per ton coming Jan. 3. The average cash price for the first two months was $6,096.87 per ton, marking a 7% decline from the 2018 annual average.

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