ICSG: Copper market in surplus through first four months of 2021
With all eyes on the labor situation at BHP’s Escondida copper mine — the world’s largest copper mine — global copper supply could get a lot tighter if the situation leads to a prolonged strike.
In 2017, workers at the mine engaged in a 44-day strike.
However, at least through the first four months of the year, the International Copper Study Group (ICSG) estimated the global copper market posted an apparent surplus of 70,000 metric tons.
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Copper production up 4% through four months
Meanwhile, the ICSG estimated global copper production rose by 4% through the first four months of 2021 compared with the same period in 2020.
Furthermore, concentrate production rose by 6% and solvent extraction-electrowinning fell by 4%.
In Chile, the world’s top copper producer, copper mine production fell by 2%. Chile’s concentrate production rose by 3% but solvent extraction-electrowinning fell by 16%.
However, the union representing workers at BHP’s Escondida mine in China voted to reject the company’s latest contract offer. The two sides have entered a mediation period, after which the union can launch a strike if an agreement cannot be reached.
Elsewhere, No. 2 producer Peru saw its copper mine production rise by 10% year over year during the four-month period. However, Peru’s production during the period fell by 27% compared with the first four months of 2019.
Indonesia’s copper output rose by 80% due to ramp-up at the Grasberg mine, the ICSG noted.
Refined copper production up 4%
Meanwhile, global refined copper production rose by 4% during the first four months of the year.
China’s refined production increased by 8%, according to preliminary data. On the other hand, Chile’s refined copper output dropped by 8%.
Global refined copper production from scrap rose by 3% during the period.
Copper price bounces back to close July
As noted previously, the copper price had surged to an all-time high of over $10,700 per metric ton on May 10.
The price cooled over the next month, falling as low as $9,070 per metric ton in late June. After trading sideways for a month, the LME three-month copper price has made gains over the last two weeks.
LME three-month copper closed Tuesday at $9,608 per metric ton.
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