The refined copper market balance for July, excluding the adjustment for changes in China's bonded stocks, showed an apparent production surplus of 77,000 mt after six months of consecutive deficits, preliminary International Copper Study Group data showed Tuesday.
When making seasonal adjustments for world refined production and usage, July showed a production surplus of 60,000 mt, the Lisbon-based research group said in a report.
For the first seven months of the year, the data indicates a production deficit of 589,000 mt, or a seasonally adjusted deficit of 512,000 mt. That compares with a production surplus of 22,000 mt (a seasonally adjusted surplus of 114,000 mt) for the same period of 2013.
In the first seven months of 2014, world usage is estimated to have increased by around 12% to 13.4 million mt compared with the same period last year, supported by strong apparent demand in China, the ICSG said.
"Chinese apparent demand increased by 21% based on a 34% increase in net imports of refined copper from the low net import level in the first half of 2013," ICSG analysts said in the report.
Based on the average of stock estimates provided by independent consultants, Chinese bonded stocks increased by around 120,000 mt in the first seven months of 2014 from the year-end 2013 level. Stocks declined by around 390,000 mt in the same period of 2013.
In the first seven months of this year, the world refined copper balance adjusted for Chinese bonded stock changes indicates a deficit of around 470,000 mt compared with a deficit of 365,000 mt in the first half of 2013, the ICSG said.
Excluding China, world usage in the first seven months increased by around 5%, supported mainly by apparent usage growth of 11% in the European Union and 10% in Japan. However, usage in the first seven months of 2013 was 3% lower in the EU and in Japan, respectively, than in the first seven month of 2012.
World mine production is estimated to have increased by around 3% in the first seven months of 2014 to 10.5 million mt compared with mine production in the same period of 2013, according to the ICSG.
WORLD MINE CAPACITY UTILIZATION DOWN
Concentrate production increased by 4%, while solvent extraction-electrowinning (SX-EW) increased by 1%.
"With the exception of Indonesia (-10%), where production remained constrained by the ban on concentrates exports, Zambia (-13%) where output was impacted by an operational failure at the Lumwana mine and lower production levels at other producers, and Australia (-4%) where two mines closed temporarily, all of the other major copper-mine producing countries had greater output," the ICSG said.
Production increased by 2% in Chile, 7% in Peru, 12% in the US (where production in the first half 2013 was impacted by the landslide at Bingham Canyon mine), 13% in the Democratic Republic of Congo, 8% in Mexico and 50% in Mongolia, according to the ICSG.
The average world mine capacity utilization rate for the first seven months of 2014 was 82.7% down with 83.9% for the same year-ago period.
World refined production is estimated to have increased by around 7% in the first seven months of 2014 to 12.8 million mt compared with refined production in the same period of 2013: primary production was up by 7% and secondary production (from scrap) was up by 8%.
The main contributor to growth was China (+17%, 615,000 mt), followed by India, the Democratic Republic of Congo, the US and Japan, where aggregated production increased by 16% (330,000 mt).
Output in Chile, the second biggest world refined copper producer, declined by 3% owing to an 7.5% decline in electrowon production, according to the ICSG.
On a regional basis, refined production is estimated to have increased in Africa (9%), North America (10%), Asia (11%), Europe (1.5%) and Oceania (10%) and to have declined in South America (-2.5%).
The average world refinery capacity utilization rate for the first seven months of 2014 was 80% compared with 78.1% in the same period of 2013, the ICSG said.
