NEVER TOO MUCH
Current ICSG projections are for a small deficit of about 90 000 t in 2018 owing to lower than anticipated refined copper production
Photo by: Reuters
During the International Copper Study Group (ICSG) meeting in Lisbon, Portugal, last month, the ICSG reported that it expected that, after a decline of 1.5% in 2017, global mine production, after adjusting for historical disruption factors, would grow by about 2% in 2018 and 1.2% in 2019.
The ICSG noted that 2017 mine production fell, owing to significant supply disruptions and a lack of significant projects coming on stream. However, a recovery in production from Chile and Indonesia, as well as the restarting of temporarily closed capacity in the Democratic Republic of Congo (DRC) and Zambia, had resulted in a slightly more positive outlook in the short term.
Overall growth had been negatively affected by lower output from Canada as well as operational problems in China, Peru and the US. As a consequence, the ICSG’s forecast mine production had been revised down, compared with the previous forecast of 2.9% made in April.
Growth in 2019 is predicted to be about 1.2% and to be impacted on by a sharp decline in Indonesian output. Global refined production is expected to increase by about 2.7% in 2018 and 2019.
The ICSG noted that a series of planned and unplanned shutdowns and operational issues at major smelters mainly in Australia, India and the Philippines, combined with lower- than- anticipated output in Canada, Chile and the US, had resulted in a downward revision in its forecast for global refined production from 4% in April.
The organisation stated that the production problems were partially offsetting strong increases in the countries where plants were recovering from maintenance work undertaken in 2017 and growth in solvent-extraction and electrowinning output arising from the restart of temporarily closed capacity in the DRC.
China would remain the biggest contributor to global refined production growth in 2018 and 2019, followed by the DRC, the ICSG commented.
After growth of 5% in 2017, global secondary production from scrap was expected to be unchanged this year.
In 2019, planned electrolytic refined production is likely to be constrained by tightness in the availability of concentrates, resulting in a limited increase of 2.7%.
Demand
Global apparent refined use is expected to increase by about 2.1% in 2018 and 2.6% in 2019 on the back of sustained growth in copper demand, as a result of its “importance to the modern technological society”.
Infrastructure development in major countries such as China and India and the global trend towards cleaner energy will continue to support growth in copper demand. Additionally, the global economy has performed well this year, with growth expected to be similar to growth in 2017.
However, ICSG’s forecast for global use growth in 2018 has been slightly reduced, compared with the previous forecast, mainly as a result of weaker-than-expected consumption in some Asian countries and the US.
Global growth for 2019 remains essentially the same as the previous forecast of 2.6%.
Current ICSG projections are for a small deficit of about 90 000 t in 2018, compared with a surplus of about 40 000 t foreseen at its April meeting. “The switch to deficit is mainly [due] to lower than previously anticipated refined copper production.”
For 2019, the ICSG expects the market to present a deficit of about 65 000 t, compared with the deficit of 330 000 t forecast in April, mainly as a result of upward revisions in refined production.