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VANCOUVER (miningweekly.com) – The latest data from the Lisbon, Portugal-based International Copper Study Group (ICSG) points to a 21% year-on-year widening in the global deficit of refined copper, as refined supplies remain stagnant.
During 2017, the global refined copper balance slid to a deficit of 163 000 t of red metal, compared with the 135 000 t recorded during 2016, which has been adjusted for changes in Chinese bonded stocks.
According to the ICSG, global mine output in 2017 fell 2% year-on-year to 20-million tonnes, which was mainly attributable to a 1% decline in Chile production – the world’s largest producer of the red metal – which was negatively affected by the strike at the Escondida mine in the first part of the year and lower output from State-owned Codelco mines.
Lower grades at mines in Argentina, Canada, Mongolia and the US resulted in 59%, 14%, 14% and 12% fewer tonnes of copper produced, by each respective country. A 12.5% decrease in Indonesian concentrate output also weighed on global concentrate supplies, as output was constrained by a temporary ban on concentrate exports that started in January 2017 and ended in April 2017.
These reductions in output were partially offset by increases of 30% and 4% respectively in Kazakhstan and Peru.
Global refined output in 2017 is estimated to have risen 0.6% year-on-year to 23.5-million tonnes with primary production (electrolytic and electrowinning) declining by 0.15% and secondary production (from scrap) increasing by 4.5%.
The ICSG advised that apparent demand rose by a modest 0.7% in 2017, to 23.7-million tonnes of refined copper, as improved scrap supply constrained world refined copper usage growth globally in 2017. The think tank noted that Chinese apparent use (excluding changes in unreported stocks) increased by 0.9%, as refined copper output increased by 5%, but was offset by net imports of refined copper falling 9.5%.
The copper price gained about 27% during 2017, up to mid-February, and the London Metals Exchange (LME) three-month contract showed a bid price on Tuesday of $6 817.50/t, which reflected the lowest level in more than three months as rising inventories signal healthy supply. LME copper stocks grew by a further 3 200 t on Tuesday to bring the total to 322 475 t, surging 61% this month.