Global copper market experiences surplus in January-July as refined production up 7%, ICSG reports
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(Kitco News) - According to preliminary data from the International Copper Study Group (ICSG), global refined copper balance in January-July 2023 indicates an apparent surplus of about 215,000 t, as refined copper production increased by about 7% while refined copper usage grew by about 4%.
ICSG said that in January-July 2023, global copper mine production increased by approximately 1.8%, with concentrate production increasing by about 1.7% and solvent extraction-electrowinning (SX-EW) by 2%.
According to the report, although global mine production over the first seven months of 2023 benefitted from some start-ups and expansions, world growth was limited by operational issues in Chile, China, Indonesia, Panama and the United States, as well as by community actions in Peru.
However, ICSG noted that global copper production growth rates have been improving, increasing from 0.9% in Q1 2023 to 2.8% in Q2 2023 and 3% in July (compared to same periods in 2022).
ICSG said that production in Chile, the world's largest copper producing country, declined by 3% in the first seven months, mainly as a consequence of the fact that a number of mines in the country were negatively impacted by operational issues, lower grades and reduced water supply due to a drought in the central region.
In Peru, the world's second largest copper producer, local communities' actions continued to impact production at a number of mines including Las Bambas and Antapaccay.
However, despite these constraints Peruvian mine production increased by 20%. This rise was primarily a result of additional output from Quellaveco (commissioned in July 2022), continued ramp-up at Mina Justa and improved production at Southern Copper.
ICSG added that Indonesian output was down by 4.5% as Grasberg operations were temporarily disrupted by significant rainfall and landslides, while output in the D.R.Congo (DRC) is estimated to have grown by about 10% due to the expansion of the Kamoa mine and new/expanded capacity at other mines.
ICSG's preliminary data indicate that world refined copper production increased by about 7% in the first seven months of 2023 with primary production (electrolytic and electrowinning from ores) up by about 6% and secondary production (from scrap) up by 12%.
"Growth in world refined production was mainly attributed to strong performances in China and the DRC, due to expanded capacity, with global output elsewhere declining by 0.5%," ICSG said.
Importantly, the group noted that the global apparent refined copper usage grew by about 4% in the first seven months of 2023, with Chinese apparent demand (excluding changes in bonded/unreported stocks) grew by around 9%; however, world ex-China refined usage is estimated to have declined by about 2.5%.
ICSG also said that preliminary world refined copper balance in the first seven months of 2023 indicates an apparent surplus of about 215,000 t, based on Chinese apparent usage (excluding changes in bonded/unreported stocks). The world refined copper balance adjusted for estimated changes in Chinese bonded stocks indicated a market surplus of about 243,000 t.
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