The world refined copper balance for the first two months of 2017 indicates a surplus of around 150,000 mt, according to preliminary data released Monday by the International Copper Study group.
The surplus was mainly due to the decline in Chinese apparent demand, the Lisbon-based research group said in a report. China currently represents 47% of the world copper refined usage.
Adjusting for changes in unreported Chinese stocks, the global refined balance indicates a surplus of about 255,000 mt for the first two months of 2017.
ICSG analysts estimated the surplus in January at 50,000 mt.
World mine production is estimated to have declined by around 2% in the first two months to 3.06 million mt, with concentrate production declining by around 1% and solvent extraction-electrowinning (SX-EW) declining by 5%.
The decline in world mine production was mainly due to a 10% decline in Chilean mine production, negatively affected by the strike at Escondida mine and lower output from Codelco mine, ICSG analysts said.
Mine output was also affected by a decline in Canadian and Mongolian concentrate production of 19% and 23%, respectively, mainly due to lower grades in planned mining sequencing, as well as a 10% decline in Indonesian concentrate production due to a temporary ban on concentrate exports that started in January and ended in April.
However, overall decline was partially offset by an 18% and 15% rise in Mexican (concentrate and SX-EW) and Peruvian (concentrate) output, respectively, both countries benefiting from new and expanded capacity that was not yet fully available in the same period of last year, the ICSG said.
On a regional basis, production rose by 5% in Europe, including Russia, and 10% in Oceania, while declining by 4% in the Americas and 6% in Africa, and remaining essentially unchanged in Asia, according to ICSG data.
World refined production is estimated to have remained essentially unchanged in the first two months of 2017 at 3.75 million mt, with primary production (electrolytic and electrowinning) declining by 3% and secondary production (from scrap) increasing by 11%.
"Increased availability of scrap allowed world secondary refined production to increase, notably in China," ICSG analysts said. "The main contributor to growth in world refined production was China (up 4%), followed by Mexico (14%) where expanded SX-EW capacity contributed to refined production growth."
But overall growth was partially offset by a 16% decline in Chile, the second world leading refined copper producer, where both primary electrolytic refined production and electrowinning production declined, the ICSG said.
Production also declined in the third- and fourth-leading refined copper producers, namely, Japan (in electrolytic production from concentrates) and in the US (mainly in electrowinning output).
On a regional basis, refined output is estimated to have increased in Asia (3%), in Africa (2%) and in Europe, including Russia (1.5%) while declining in the Americas (11%) and in Oceania (5%).
World apparent refined usage is estimated to have declined by around 3% in the first two months of 2017 to 3.6 million mt.
"Preliminary data indicates that although world ex-China usage might have grown by around 2.5%, growth was more than offset by a 9.5% decline in Chinese apparent demand," according to the ICSG.
"Chinese apparent demand, excluding changes in unreported stocks, declined by 9.5% because although refined copper production increase by 4%, net imports of refined copper declined by 29%."
On a regional basis, usage is estimated to have increased by 1.5% in Europe while declining by 1% in the Americas and 5% in Asia. When excluding China, Asia usage increased by 6%, the ICSG said.
