Monday, September 21, 2020

Global Copper Market Flips to Deficit by June After Q1 Surplus: ICSG

Author: Nick Lazzaro 

Editor: Keiron Greenhalgh 


Deficit in June hits 235,000 mt after 130,000 mt surplus in Q1

Refined copper demand supported by China as usage slides elsewhere

Pittsburgh — The global refined copper balance through June plunged to an apparent deficit of 235,000 mt after reaching a 130,000 mt surplus at the end of the first quarter, according to data released Sept. 21 by the International Copper Study Group.

Register Now Estimated data from the ICSG indicated that monthly world refined copper usage rose to 2.25 million mt in June from 2.09 million mt in May, but production remained mostly unchanged at 2.06 million mt.

Global apparent refined copper usage in the first half of 2020 stayed flat year over year at 12.1 million mt as markets slowly recovered from coronavirus pandemic-related lockdowns that negatively impacted the world economy and copper end-use sectors, according to the trade association.

ICSG said the stability in copper demand was mostly supported by China, where net refined copper imports and apparent usage increased by 31% and 9%, respectively, in the first half of 2020.

Conversely, apparent refined copper usage slid 9% year over year ex-China during the first six months. On a regional basis, usage declined by 12% in Japan, 10% in the EU, 4.5% in the US and 8% in Asia ex-China.

The global refined copper balance from January to June adjusted for changes in Chinese bonded stocks indicated a market surplus of about 278,000 mt, the ICSG added.

Copper mine production slips through June

World copper mine production during the first half of the year slipped only 1% compared with the year-ago period to 9.8 million mt, as mine production recovered in June after temporary shutdowns caused by the pandemic in April and May, the ICSG said.

Mines in Peru were impacted most by the pandemic in April and May when mine suspensions, operational issues and adverse weather led to a 38% year-on-year fall in output during the two-month period. Mining production in June then declined by only 9% year over year as the country's industry came back online.

Chile, the world's biggest copper mining country, saw a 2.6% increase in output.

Copper-mine production in the Democratic Republic of Congo rose 5% in the period as mining ramp-ups offset the temporary closure of the Mutanda mine in 2019.

In Indonesia, the ICSG said copper production in the first half of the year grew by 18% as output levels improved following the transition of the country's two major copper mines to different ore zones.

ICSG analysts said year-to-date copper mine output through June declined in Australia, Canada, Mexico, Mongolia and the US.

Through June, global copper concentrate production fell 1.2% and solvent extraction-electrowinning output slipped by 0.4%.

Refined copper production rises slightly

ICSG data showed a 1% increase in world refined copper production to 11.9 million mt during the first six months of 2020, compared with the first half of 2019, with primary production from electrolytic and electrowinning operations increasing by 2.3% and secondary production from scrap falling 5.2%.

Total refined copper production in Chile through June climbed 12.5% year over year, mainly supported by a 51% surge in electrolytic refined output.

The ICSG said Chinese refined production growth was negatively impacted by temporary shutdowns related to the pandemic, limited scrap supply, disrupted copper concentrate imports and oversupply in the sulfuric acid market.

In Africa, refined production in the DRC increased 4%, but production in Zambia slid 16% due to operational issues and temporary shutdowns.

Output in India is estimated to have declined by 25% year over year through June due to the suspension of Birla Copper's operations at the end of March following a nationwide lockdown, ICSG analysts said.

ICSG said refined production in Japan rose by 4%, mainly representing a recovery from a number of maintenance shutdowns in the same period of 2019.

US refined copper production dropped 12% due to maintenance shutdowns and the ongoing labor strike at Asarco's US operations that began in October.

No comments: