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Preliminary Data for March 2019 - ICSG

Metal News - Published on Thu, 04 Jul 2019

Image Source: Recycling Today
The International Copper Study Group released preliminary data for March 2019 world copper supply and demand in its June 2019 Copper Bulletin. The Bulletin and ICSG online statistical database provide detailed data, on a country basis, for copper mine, smelter, refined and semis production and copper refined usage, trade, stocks and prices. Preliminary data indicates that world mine production declined by about 1.3% in the first quarter of 2019, with concentrate production declining by about 1% and solvent extraction electrowinning (SX-EW) by 3.5%:

1. Although a few countries experienced growth, this was largely offset by declines in two major producing countries, namely Chile and Indonesia.

2. Production in Chile, the world’s biggest copper mine producing country, declined by 5% mainly due to lower copper head grades.

3. Indonesian concentrate production declined by 52% primarily as a consequence of the transition of the country’s major two mines to different ore zones leading to temporarily reduced output levels.

4. After aggregated growth of 11% in 2018, production in the Democratic Republic of Congo (DRC) and Zambia increased by only 1.7% in the first quarter of 2019 as reduced production at some mines partially off-set ramp-up output at other operations.

5. Production in Peru (the world’s second largest copper mine producing country), Australia, China and Mongolia increased due to improved grades and recovery from constrained output in 2018.

6. On a regional basis, mine production is estimated to have increased by around 2% in Africa, 2% in North America and 5% in
Oceania but declined by about 3% in Asia, 3% in Latin America and 3.5% in Europe.

Preliminary data indicates that world refined production declined by around 1.1% in the first quarter of 2019 with primary production (electrolytic and electrowinning) declining by around 1.5% and secondary production (from scrap) increasing by 0.7%.

The decline in world refined production was mainly due to:

1. A 32% decline in Chilean electrolytic refined output due mainly to temporary smelter shutdowns whilst undergoing upgrades to comply with new environmental regulations.

2. A decline of 45% in India’s production negatively impacted by the shutdown of Vedanta’s Tuticorin smelter in April 2018.

3. A 28% decrease in Zambian refined output due to power supply interruptions, smelter outages and the introduction on the
1st January 2019 of a 5% custom duty on copper concentrate imports.

4. Reduced output in major producing countries including Germany, Japan, Peru and the United States due to smelter maintenance shutdowns.

However overall decline was partially offset by growth in China due to the continued expansion of Chinese smelter/refinery capacity. Other countries recovering from production constraints in 2018 such as Australia, Brazil and Poland also contributed to growth.

On a regional basis, refined output is estimated to have increased Asia (2.5%) and in Oceania (24%) while declining in Africa
(-8%), in the Americas (-12%) and remaining essentially unchanged in Europe.

Preliminary data indicates that world apparent refined usage increased by about 0.8% in the first quarter of 2019:

1. Chinese apparent usage grew by around 4%.

2. Among other major copper users, demand increased in India but declined in the EU and the United States, remaining essentially flat in Japan.

3. World ex-China usage declined by around 2%.

Preliminary world refined copper balance in the first quarter of 2019 indicates a small deficit of about 30,000t:

1. In developing its global market balance, ICSG uses an apparent demand calculation for China that does not take into account changes in unreported stocks [State Reserve Bureau, producer, consumer, merchant/trader, bonded]. To facilitate global market analysis, however, an additional line item Refined World Balance Adjusted for Chinese Bonded Stock Changes is included in the attached table that adjusts the world refined copper balance based on an average estimate of changes in unreported inventories provided by three consultants with expertise in China’s copper market.

2. In the first quarter of 2019, the world refined copper balance adjusted for changes in Chinese bonded stocks indicated a market surplus of around 105,000 tonne.

Copper Prices and Stocks:

1. Based on the average of stock estimates provided by independent consultants, China’s bonded stocks are thought to have increased by 135,000 tonne in the first quarter of 2019 compared to the year-end 2018 level. Bonded stocks decreased by around 5,000 t in the same period of 2018.

2. As of the end of May, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totaled 405,940 t, an increase of 55,444 tonne (+16%) from stocks held at the end of December 2018. Stocks were up at the LME (+60%) and SHFE (+39%) and down at COMEX (-71%).

3. The average LME cash price for May 2019 was USD 6,028.31 per tonne, down 6.5% from the April average of USD 6,445.10 per tonne.

4. The 2019 high and low copper prices through the end of May were USD 6,572 per tonne (on 1st Mar) and USD 5,780.50 per tonne (on the 31st May), respectively, and the year average was USD 6,221.50 per tonne (4.6% below the 2018 annual average).

World Refined Copper Usage and Supply Trends, 2015-2019
Thousand metric tonnes, copper
World Mine Production19,14920,38620,09620,6144,9614,8961,8321,6671,5211,708
World Mine Capacity22,34923,41423,86123,8846,0636,0332,0632,0701,8772,086
Mine Capacity Utilization (% )85.787.184.286.381.881.188.880.58181.9
Primary Refined Production18,89719,49519,50020,0684,8714,7981,7601,6491,4851,664
Secondary Refined Production3,9453,8664,0534,0431,0131,020337354320346
World Refined Production (Secondary+Primary)22,84323,36223,55324,1115,8845,8182,0972,0031,8052,010
World Refinery Capacity26,54226,84327,37027,6256,7916,9922,3932,4012,1752,416
Refineries Capacity Utilization (% )86.18786.187.386.683.287.683.48383.2
World Refined Usage 1/23,08123,51223,73224,5105,8025,8502,0832,0561,7332,061
World Refined Stocks End of Period1,5051,3751,3811,2351,7461,3341,2351,2241,2831,334
Period Stock Change171-1306-14736410040-115952
Refined Balance 2/-239-151-179-39981-3214-5372-51
Seasonally Adjusted Refined Balance 3/ 31-115-3-67-6-42
Refined Balance Adjusted for Chinese bonded stock change 4/-342-138-177-4567610327-33137-1

Due to the nature of statistical reporting, the published data should be considered as preliminary as some figures are currently based on estimates and could change.
1/ Based on EU apparent usage.
2/ Surplus/deficit is calculated using refined production minus refined usage.
3/ Surplus/deficit is calculated using seasonally adjusted refined production minus seasonally adjusted refined usage.
4/ For details of this adjustment see the paragraph of the press release on “World refined copper balance”.

Source :

Posted By : Ratan Singh on Thu, 04 Jul 2019
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