Furthermore, the global copper market posted an apparent deficit of 255,000 metric tons during the period.
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Copper mine production slips
Although copper mine production has recovered as the year has progressed, output through the first seven months of the year fell 0.8%.
Peru, the world’s second-largest copper producer, saw significant pandemic-related impacts on its copper operations earlier in the year. The country’s copper mine output fell 18% during the first seven months of the year. In the April-May period, Peru’s copper output fell 38% on a year-over-year basis.
However, activity has picked up since then. Peru’s copper mine output fell by only 2.2% year over year in July.
Meanwhile, Peru’s southerly neighbor, Chile — the world’s top copper producer — saw its output rise 1.5% in the first seven months.
Copper mine production down but refined copper output rises 1%
Aside from copper mine production, output on the refined copper side rose by 1% during the first seven months of the year, the ICSG noted.
Chile’s total refined output, for example, jumped 10%. Refined production in the Democratic Republic of the Congo and in Zambia rose by 6% and 9%, respectively.
Copper price gains
It’s no secret that the copper price has been one of the fastest risers among the base metals this year.
Recently, MetalMiner’s Stuart Burns weighed in on the copper price rise and, moreover, its sustainability.
“Is copper’s rise overdone?” Burns asked.
“In reality, no, probably not.
“Lockdowns outside of China have impacted copper demand in the rest of the world. Vaccine or not, the world will have to come to terms with the pandemic; demand will come back.”
The ICSG noted the average LME copper cash price in September marked a 3.3% increase from the previous month. The average price in September stood at $6,712 per metric ton.
Strike averted at Escondida
One factor previously hanging in the balance with the potential to impact copper mine production was the labor situation at the Escondida mine, the world’s largest copper deposit.
With a strike potentially brewing, a work stoppage — as occurred in Q1 2017 and lasted for six weeks — the copper price could have received significant upward support.
However, Reuters reported last week that union supervisors at the mine had struck a deal, thus averting a labor stoppage. The mine is majority-owned by BHP (57.5%).
According to BHP’s latest quarterly production report, copper production from the Escondida mine during the quarter ended Sept. 30 totaled 285 kt. The total marked a decline of 3% from the previous quarter and on a year-over-year basis.
BHP’s guidance for Escondida’s production in fiscal year 2021 is 940-1,030 kt. Output from the mine reached 1.19 million tons in fiscal year 2020, up 4% from the previous year.
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