The global refined copper market in September, excluding the adjustment for changes in China's bonded stocks, showed an apparent production deficit of around 15,000 mt, according to preliminary data released Tuesday by the International Copper Study Group.
When making seasonal adjustments for world refined production and usage, September showed a production surplus of about 25,000 mt, the Lisbon-based research group said in a report.
For the first nine months of 2016, the global refined copper balance indicates a production deficit of around 84,000 mt, and a seasonally adjusted deficit of about 29,000 mt.
That compares with a production deficit of around 28,000 mt (a seasonally adjusted surplus of about 34,000 mt) for the same nine-month period of 2015.
"In the first nine months of 2016, world apparent refined usage is estimated to have increased by around 3% (565,000 mt) compared with that in the same period of 2015 mainly due to Chinese apparent demand as world usage excluding China remained essentially unchanged," ICSG analysts said.
Chinese apparent demand increased by around 7% in the first nine months of 2016 based on a 2% increase in net imports of refined copper and 7% growth in refined production, they added.
"However, net refined copper imports have been on a declining trend in 2016 with the monthly average in the third quarter 40% below that of the first half. Monthly average Chinese apparent demand in the third quarter 2016 is 5% below that in the first half," the report said.
For the first nine months of 2016, aggregated usage in the European Union, Japan and the US fell by 0.6%.
On a regional basis, usage is estimated to have increased by 1% in Europe and 5% in Asia (when excluding China, Asia usage increased by 2%), while declining by 11.5% and 4% in Africa and in the Americas, respectively, and remaining essentially unchanged in Oceania, according to the ICSG.
World mine production is estimated to have increased by around 6% (820,000 mt) in the first nine months of 2016 compared with production in the same period of 2015.
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 44% (+530,000 mt) rise in Peruvian output that is benefiting from new and expanded capacity brought on stream in the last two years," ICSG analysts said.
"A recovery in production levels in Canada, Indonesia and the United State, and expanded capacity in Mexico, also contributed to world growth," they added.
"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 is being constrained by temporary production cuts."
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 ICSG said.
The average world mine capacity utilization rate for the first nine months of 2016 increased to 86% from 85% in the same period of 2015.
World refined production is estimated to have increased by about 3% (510,000 mt) in the first nine months compared with refined production in the same period a year ago: primary production was up by 2.5% and secondary production (from scrap) was up by 5.5%.
The main contributor to refined production growth was China (+7%), followed by the US, where production increased by 13%, and Mexico (+19%) where expanded SX-EW capacity is contributing to refined production growth.
Output in Chile and Japan, the second and third leading refined copper producers, increased by around 1% and 3%, respectively. 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 increased in the Americas (5%), Asia (6%) and Oceania (8%) while declining in Africa (-13%) and in Europe (-3.5%).
The average world refinery capacity utilization rate for the first nine months of 2016 remains practically unchanged from that in the same period of 2015 at around 83.5%, according to ICSG data.
