ICSG: Global copper market in deficit by 330K tons

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Bombardho/Adobe Stock

According to the most recent report from the International Copper Study Group (ICSG), the global copper market through the first eight months of the year posted a deficit of 330,000 tons.

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Copper mine production slips

Global copper mine production dropped 0.5% on a year-over-year basis, according to the ICSG. Concentrate production was about flat, while solvent extraction-electrowinning (SX-EW) fell 1.5%.

Production in top copper producer Chile remained down, off 0.5% on a year-over-year basis due to lower copper head grades and supply disruptions.

Indonesian copper mine output dropped by 51% due to “the transition of the country’s major two mines to different ore zones leading to temporarily reduced output levels.”

In the Democratic Republic of the Congo (DRC) and Zambia, aggregate growth reached 13% in 2018 but was down 2% through the first eight months of this year due to “temporary suspensions at SX-EW mines, reductions in planned production and few operational constraints.”

On the other hand, output increased in Australia, China, Mexico, Peru and the U.S.

Elsewhere, Panama joined the ranks of copper-mining countries.

“Panama started mining copper earlier this year, with the commissioning of the Cobre de Panama mine, and is the biggest contributor to world mine production growth in the first eight months of 2019,” the ICSG said.

Refined metal production flat

On the refined metal side, output was about flat on a year-over-year basis, with primary production down 0.3% and secondary production from scrap increasing 1.8%.

Chilean output fell 32%, while Zambian output dropped 33%. Indian production was down 25%, as it continues to be impacted by the 2018 closure of Vedanta’s Tuticorin smelter (following protests by area residents).

The U.S., Japan and Peru also saw reduced refined copper output during the period.

Apparent refined usage up 0.5%

In addition, apparent refined copper usage increased by 0.5%, according to preliminary data.

China’s imports of refined copper fell 13%, but its apparent usage grew 2.4% due to higher refinery output, the ICSG said.

Global usage, ex-China, declined by 1.5%.

Copper prices dip slightly in October

On the price front, the average LME cash price in October checked in at $5,742.89 per ton, down 0.04% from September’s average of $5,745.48 per ton.

Meanwhile, the average price for the year through October, $6,007.69 per ton, marked a 7.9% decline compared with the 2018 annual average.

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As of the end of October, copper stocks at major exchanges — 431,192 tons — had increased 23% from stock levels in December 2018.

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