According to preliminary ICSG data, the refined copper market for June 2016 (excluding the adjustment for changes in Chinaâs bonded stocks) showed an apparent production deficit of around 83,000 metric tonnes (t) mainly due to strong Chinese apparent refined copper demand. When making seasonal adjustments for world refined production and usage, June showed a production deficit of about 47,000 t. The refined copper balance for the first half of 2016, including revisions to data previously presented, indicates a production deficit of around 306,000 t (and a seasonally adjusted deficit of about 227,000 t). This compares with a production deficit of around 54,000 t (a seasonally adjusted surplus of about 27,000 t) for the same period of 2015.
In the first half of 2016, world apparent refined usage is estimated to have increased by around 5% (570,000 t) compared with that in the same period of 2015 mainly due to strong Chinese apparent demand. Chinese apparent demand increased by around 11% based on a 20% increase in net imports of refined copper from the lower net import level in early 2015 and consequently lower apparent demand. Excluding China, world usage remained essentially unchanged. On a regional basis, usage is estimated to have increased by 5% in Europe and 7% in Asia (when excluding China, Asia usage declined by 2%), while declining by 17% and 4% in Africa and in the Americas respectively and remaining essentially unchanged in Oceania.
World mine production is estimated to have increased by around 4.5% (430,000 t) in the first half of 2016 compared with production in the same period of 2015. Concentrate production increased by 6% while solvent extraction-electrowinning (SX-EW) declined by 1%. The increase in world mine production was mainly due to a 50% rise in Peruvian output that is benefitting from new and expanded capacity brought on stream in the last two years. 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 5.5% decline in production in Chile, the worldâs biggest copper mine producer and a 10% decline in DRC where output is constrained by temporary production cuts. On a regional basis, production rose by 7% in the Americas and 6% in Asia but declined by 4% in Africa while remaining essentially unchanged in Europe and Oceania. The average world mine capacity utilization rate for the first half of 2016 remains practically unchanged from that in the same period of 2015 at around 84.5%.
World refined production is estimated to have increased by about 3% (320,000 t) in the first half 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 4.5%. The main contributor to growth was China (+6%), followed by the United States where production increased by 16%. Output in Chile and Japan, the second and third leading refined copper producers, increased by around 2% 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 (6%), Asia (5%) and Oceania (18%) while declining in Africa (-15%) and in Europe (-4%). The average world refinery capacity utilization rate for the first half of 2016 increased to 83.5% from 82.5% in the same period of 2015.
Based on the average of stock estimates provided by independent consultants, Chinaâs bonded stocks increased by around 155,000 t in the first half of 2016 from the year-end 2015 level. Stocks increased by around 70,000 t in the same period of 2015. In the first half of 2016, the world refined copper balance adjusted for the change in Chinese bonded stocks indicates a production deficit of around 151,000 t compared to a surplus of about 16,000 t in the same period of 2015.
The average LME cash price for August was US$4,758.20 per tonne, down from the July average of US$4,855.79 per tonne. The 2016 high and low copper prices through the end of August were US$5,103.00 (on 18th Mar) and US$4,310.50 per tonne (on 15th Jan), respectively, and the year-to-date average was US$4,727.53 per tonne (14% below 2015 annual average). As of the end of August, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 531,615 t, an increase of 49,747 t (+10%) from stocks held at the end of December 2015. Compared with the December 2015 levels, stocks were down at COMEX and SHFE and up at the LME.
