Dear Members,
Copper: Preliminary Data for 2008
The International Copper Study Group (ICSG) released preliminary data for 2008 for world copper supply and demand in its March 2009 Copper Bulletin. The Bulletin is available for sale upon request.
According to the preliminary ICSG data, including revisions to data previously presented, the refined copper market balance for the full year 2008 indicated a market surplus of about 360,000 metric tonnes (t). The deficit of about 140,000 t in the 1st half of the year was more than offset by a surplus of around 500,000 t in the 2nd half of the year. The 2008 market surplus compares with a surplus of around 290,000 t for 2007. In December, weaker holiday-period usage in the United States and the European Union and weaker usage in Japan resulted in a large apparent monthly surplus of around 170,000 t.
World refined copper usage is estimated to have increased by 2.2% (387,000 t) in 2008 compared with usage in 2007. World usage growth was mainly driven by China, where apparent usage grew by 14%. Without China, world usage actually decreased by 2% mainly impacted by depressed usage in the other three major consuming regions, the EU-15 countries, Japan, and the United States, where it decreased by 6%, 5.4%, and 8.7%, respectively. On a regional basis, usage increased in Africa, Asia (incl. China) and Oceania by 7.1%, 7.2% and 3.2% respectively, and decreased in the Americas (-3.7%) and in Europe (-3.3%). Note that China’s apparent copper usage is based only on reported data (production + net trade +/- SHFE stock changes+/-industry stock changes, if reported ) and does not take into account changes in unreported stocks [State Reserve Bureau (SRB), producer, consumer and merchant/trader], which may be significant during periods of stocking or de-stocking.
World mine production in 2008 remained unchanged as compared to the 2007 level; concentrate production was down by 108,000 t
(-0.9%) while solvent extraction-electro winning (SX-EW) was up by around 107,000 t (+3.5%). Operational failures, labour unrest and lower ore grades resulted in stagnant production levels that did not keep pace with capacity growth. As a result, and based in ICSG production capacity data, the average global mine capacity utilization rate fell to about 82.3% in 2008, the lowest level since 1989. Although mine output increased in China, Congo, Peru and the United States, world mine production was mainly affected by lower output in major producing countries such as Chile (-4%), Indonesia (-17%) and Mexico (-27%). On a regional basis, mine production was up in Africa (13%), down in America (-1%), and practically unchanged in Asia, Europe and Oceania.
Total world refined production increased by 2.6% (465,000 t) in 2008 compared with refined production in 2007: primary production was up by 3.2% and secondary production (from scrap) was down by 1%. China was the biggest contributor to growth (9.4%) due to the expansion of its copper refinery capacity. Production was down in several countries including India, Japan, South Korea and the United States, where output was affected by operational failures, adverse weather conditions and maintenance shutdowns. However, those decreases were more than offset by increases in other countries such Australia, Chile, China, Congo, Peru and the Scandinavian countries. On a year-on-year basis, refined production was down in Africa (-3.5%) and North America (-1.1%) but up in all remaining regions: Latin America (4.7%), Asia (2.2%), Europe (3%) and Oceania (14%). The average global refined capacity utilization was about 82% in 2008 slightly below the average of recent years.
The average LME cash price for February 2009 was US$3,314.73 per tonne, up from the January 2009 average of US$3,220.69 per tonne. The 2009 high and low copper prices through the end of February were US$3,527.00 and US$3,050.00 per tonne, respectively, and the average was US$3,266.56 per tonne. As of the end February 2009, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 606,107 t, an increase of 216,424 t from stocks held at the end of December 2008. Stocks were up at all three exchanges.
World Refined Copper Usage and Supply Trends, 2002-2008
Thousand metric tonnes, copper
Due to the nature of statistical reporting, the published data should be considered as preliminary as some figures are currently based on estimates and could change. p/ preliminary, 1/ Based on EU apparent usage. 2/ Surplus/deficit is calculated using refined production minus refined usage. 3/ Surplus/deficit is calculated using seasonally adjusted refined production minus seasonally adjusted refined usage.
Yours Sencierly,
Commodity Daily
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