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Global copper surplus shrinks to 17kt in 9M23, ICSG reports

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(Kitco News) - According to preliminary data from the International Copper Study Group (ICSG), global refined copper balance in 9M 2023 indicates an apparent surplus of about 17kt (8M 2023: 99kt), as refined copper production increased by about 5.3% while refined copper usage grew by about 3%.

ICSG said that in January-September 2023, global copper mine production increased by approximately 1.1%, with concentrate production increasing by about 1.3% and solvent extraction-electrowinning (SX-EW) by 0.2%.

According to the report, although global mine production over the first nine months of 2023 benefitted from some startups and expansions, world growth was limited by operational issues in Chile, China, Indonesia, Panama and the United States, mainly in the 1st half of the year.

ICSG said that production in Chile, the world's largest copper producing country, declined by 1.9% in January-September 2023, mainly because 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. However, after a 4% year-over-year decline in H1 2023, Chilean production improved presenting 2.5% year-over-year growth in the 3rd quarter.

In Peru, the world's second largest copper producer, local communities’ actions continued to impact production at a number of mines. However, despite these constraints, Peruvian mine production increased by 16%, primarily due to additional output from Quellaveco (commissioned in July 2022), the continued ramp-up at Mina Justa and improved production at Cuajone and Las Bambas from last year’s temporary shutdown.

ICSG added that Indonesian output was down by 9% due to operational constraints at the Grasberg and Batu Hijau mines, while output in the D.R.Congo (DRC) is estimated to have grown by about 7% mainly as a consequence of the expansion of the Kamoa mine and new/expanded capacity at other mines.

United States output declined by 10% mainly due to reduced production at Kennecott as a result of weather related issues and the technical failure of a conveyor belt. Chinese production was lower by 6% as a consequence of operational issues at two major copper mines, Jiama and Julong.

ICSG's preliminary data indicate that world refined copper production increased by about 5.3% in January-September 2023 with primary production (electrolytic and electrowinning from ores) up by about 4.8% and secondary production (from scrap) up by 7.5%.

“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 0.7%,” ICSG said.

Importantly, the group noted that the global apparent refined copper usage grew by about 3% in January-September 2023, with Chinese apparent demand (excluding changes in bonded/unreported stocks) grew by around 8%; however, world ex-China refined usage is estimated to have declined by about 3%.

ICSG also said that preliminary world refined copper balance in January-September 2023 indicates an apparent surplus of about 17,000t, 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 35,000t.

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