The global refined copper market showed an apparent production surplus of around 154,000 mt in August, mainly due to weaker Chinese demand and seasonally weak usage in other regions, according to preliminary data released Monday by the International Copper Study Group.
When making seasonal adjustments for world refined production and usage, August showed a production surplus of about 56,000 mt, the Lisbon-based research group said.
For the January-August period, indications suggest a production deficit of around 91,000 mt, and a seasonally adjusted deficit of about 93,000 mt, according to the ICSG.
That compares with a production surplus of around 10,000 mt (a seasonally adjusted surplus of about 19,000 mt) for the same eight-month period of 2015.
World apparent refined usage in the first eight months is estimated to have increased by around 3.8% (570,000 mt) compared with the same period of 2015 mainly due to increases in China, the ICSG said.
"Chinese apparent demand increased by around 7.5% compared with the same period of 2015 based on an 8% increase in net imports of refined copper," according to ICSG analysts.
"However, July and August net refined copper imports at 176,000 mt and 175,000 mt, respectively, were the lowest since April 2013 and compares to a net monthly imports average of 312,000 mt in the first half of 2016," they said.
Aggregated usage in the European Union, Japan and the US remained essentially unchanged over the eight-month period, the ICSG said.
"On a regional basis, usage is estimated to have increased by 2.5% in Europe and 6% in Asia (when excluding China, Asia usage increased by 1.5%), while declining by 11% and 4.5% in Africa and in the Americas, respectively, and remaining essentially unchanged in Oceania.
World mine production is estimated to have increased by around 5.8% (730,000 mt) in the first eight months of 2016 compared with production in the same period of 2015, according to the ICSG.
Concentrate production increased by 7.5% while solvent extraction-electrowinning declined by 0.5%.
"The increase in world mine production was mainly due to a 45% rise in Peruvian output that is benefitting from new and expanded capacity brought on stream in the last two years," ICSG analysts said.
"A recovery in production levels in Canada and the United States, expanded capacity in Mexico and a ramp-up in production in Mongolia, also contributed to world growth."
However, overall growth was partially offset by a 4% decline in production in Chile, the world's biggest copper mine producer, and a 7% decline in Democratic Republic of Congo, where output was constrained by temporary production cuts, the ICSG said.
On a regional basis, production rose by 7% in the Americas, 9% in Asia and 7% in Oceania but declined by 4% in Africa while remaining essentially unchanged in Europe.
The average world mine capacity utilization rate for the eight-month period of 2016 increased to 85% from 84% in the same period of 2015.
World refined production is estimated to have increased by about 3.1% (470,000 mt) in the first eight months of 2016 compared with refined production in the same period of 2015: primary production was up by 2.5% and secondary production (from scrap) was up by 5.5%, the ICSG said.
The main contributor to production growth was China (+7%), followed by the US (+14%) and Mexico (+19%), where expanded SX-EW capacity contributed to refined production growth.
Output in Chile and Japan, the second and third leading refined copper producers, increased by around 2% and 3%, respectively, during the period, according to the ICSG. Refined production in the DRC and Zambia declined due to the impact of temporary production cuts.
On a regional basis, refined output is estimated to have increase in the Americas (5%), Asia (6%) and Oceania (10%), while declining in Africa (-13%) and in Europe (-3%).
The average world refinery capacity utilization rate for the first eight months of 2016 remains practically unchanged from that in the same period of 2015 at around 83%, according to the ICSG.
