Global supply/demand factors indicate an 80,000 mt surplus in the refined copper market for the first four months of this year, according to preliminary data released Thursday by the International Copper Study Group.
"This is mainly due to the decline in Chinese apparent demand; China currently represents 48% of the world copper refined usage," the Lisbon-based research group said.
Chinese apparent demand, excluding changes in unreported stocks, declined by 7% in the first four months because a 6.5% increase in refined production was offset by a 36% decline in net imports, ICSG analysts said.
Preliminary data indicates that although world ex-China usage might have grown slightly by around 0.5%, growth was more than offset by a 7% decline in Chinese apparent demand.
Among other major copper-using countries, usage increased in India, Japan and Taiwan, but declined in the US and Germany, the ICSG said.
On a regional basis, usage is estimated to have declined in all regions: in Africa by 1%, in Asia by 3%, in the Americas by 1% and in Europe by 6%. Excluding China, however, Asia usage increased by 7%.
Total usage for the first four months slipped to 7.5 million mt from 7.8 million mt in the year-ago period.
World refined production is estimated to have remained essentially unchanged in the first four months of 2017 at 7.6 million mt, with primary production (electrolytic and electrowinning) declining by 2% and secondary production (from scrap) increasing by 12%.
"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 6.5%), followed by Mexico (up 11%), where expanded SX-EW capacity contributed to refined production growth."
But overall growth was partially offset by a 16% decline in Chile, the second largest refined copper producer, where both primary electrolytic refined production and electrowinning production declined, the ICSG said.
Production also declined in the third and fourth largest refined copper producers, namely Japan (in electrolytic production from concentrates) and the US (mainly in electrowinning output).
On a regional basis, the ICSG estimates that refined production increased in Asia by 4%, in Africa by 3% and in Europe, including Russia, by 2%, while declining in the Americas by 10% and in Oceania by 11%.
World mine production is estimated to have declined by around 3.5% during the first four months of 2017 to 6.2 million mt, with concentrate production declining by around 3% and solvent extraction-electrowinning (SX-EW) declining by around 5%, according to ICSG said.
The decline was mainly due to a 12% fall in production in Chile, the world's biggest copper mining country, which was negatively affected by the strike at the Escondida mine and lower output from Codelco mines.
The decline in global mine production was also driven by drops in Canadian and Mongolian concentrate production of 19% and 22%, respectively, mainly due to lower grades in planned mining sequencing.
A 14% decline in Indonesian concentrate production due to a temporary ban on concentrate exports that started in January and ended in April also negatively affected global mine production, the ICSG said.
"However overall decline was partially offset by a 13% and 7% rise in Mexican (concentrate and SX-EW) and Peruvian (concentrate) output, respectively, with both countries benefiting from new and expanded capacity that was not yet fully available in the same period of last year," ICSG analysts said.
On a regional basis, mine production rose by 4% in Europe, including Russia, and 7% in Oceania, while declining by 6% in the Americas, 1.5% in Asia and 4% in Africa.
