Refined Copper Market Ends in 165 kt Surplus During Q1 '17

SPOKANE (Scrap Monster): The International Copper Study Group (ICSG) has released preliminary data for March 2017 in its recently published June 2017 Copper Bulletin. The Bulletin provides preliminary copper supply and demand data for the month of March this year. According to preliminary ICSG data, copper production and usage data points to a production surplus of around 165,000 metric tonnes during the first quarter of the year.

Market Balance

The refined copper market balance for the first three months of 2017 showed an apparent production surplus of around 165,000 metric tonnes. This is mainly on account of sharp decline in Chinese apparent demand.

Refined Copper Output

World refined copper production remained essentially unchanged during the initial quarter of 2017 in comparison with the corresponding period in 2016. The primary production declined modestly by 2% during the period, whereas the secondary production increased considerably by 13%. The refined copper production during the three-month period witnessed significant growth of 7% and 12% in China and Mexico respectively. The expansion of SX-EW capacity contributed to the notable jump in production by Mexico during the three-month period. The output by Chile witnessed sharp decline of 18% during Jan-Mar ‘17. The country reported considerable decline in both primary electrolytic refined production and electrowinning production. The production by Japan too reported decline. The electrowinning output by the US witnessed decline.

On regional basis, refined output by the Africa and Asia increased by 2% and 5% respectively. The output by European region including Russia witnessed increase of 2%. On the other hand, the refined copper output by Americas region declined by 12%. The refined copper production dropped by 5% in Oceania region during January to March this year.

Copper Mine Output

The world copper mine production is estimated to have declined by around 3.5% during the first quarter of 2017. Concentrate production was down by 3.0% during the period. Meantime solvent extraction-electrowinning (SX-EW) output declined 6%. The mine output from Chile reported significant decline of 14%, primarily on account of plunge in production volumes from Escondida mines due to strike and lower output from Codelco mines. Lower grades led to 18% and 23% decline in concentrates production from Canada and Mongolia respectively.

The Mexican copper mine production witnessed 17% jump during Jan-Mar ‘17. The temporary ban in concentrate exports in effect from January to April this year in Indonesia resulted in 10% decline in concentrate production by the country. Region-wise, Europe, including Russia, recorded 5% rise in production. Also Oceania recorded 9% rise in output. The Americas and Africa region recorded decline of 7% and 5% respectively in mine output. Meantime, production remained essentially unchanged in the Asian region.

Copper consumption

Meantime, global usage of the metal is estimated to have declined by around 3% during Jan-Mar ‘17. The decline in usage was mainly due to 6.5% decline in apparent usage by China. The usage by world countries excluding China grew at 1%. The metal usage by major consuming countries such as India, Japan and Taiwan increased, whereas the usage by the US and Germany reported decline during the quarter. Region-wise, the usage by Asia declined by 3%. The Americas too reported marginal decline of 1% in copper usage. Meantime, the European demand plunged by 5%. On the other hand, apparent copper usage surged higher by 7% in the Asian region excluding China.

The table given below provides World Refined Copper Supply Trends for the first three months of 2017:

Note: The above figures are in thousand metric tonnes