The refined copper balance for the first quarter of 2016, including revisions to data previously presented, indicates a production surplus of around 42,000 t (and a seasonally adjusted deficit of about 43,000 t). This compares with a production surplus of around 143,000 t (a seasonally adjusted surplus of about 75,000 t) for the same period of 2015.
In the first quarter of 2016, world apparent usage is estimated to have increased by around 7% (390,000 t) compared with that in the same period of 2015 mainly due to higher Chinese imports of refined copper. Chinese apparent demand increased by around 17% based on a 40% increase in net imports of refined copper from the lower net import level in early 2015 and consequently lower apparent usage. Excluding China, world usage declined by around 1.5%. On a regional basis, usage is estimated to have increased by 4% in Europe and 11% in Asia (when excluding China, Asia usage declined by 4%), while declining by 17% and 3.5% 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% (215,000 t) in the first quarter of 2016 compared with production in the same period of 2015. Concentrate production increased by 5.5% while solvent extraction-electrowinning (SX-EW) increased by 1%. The increase in world mine production was mainly due to a 51% 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 Indonesia and the United States and a ramp-up in production in Mongolia also contributed to world growth. However overall growth was partially offset by a 3% decline in production in Chile, the world’s biggest copper mine producer and a 13% decline in DRC where output is constrained by temporary production cuts. On a regional basis, production rose by 7.5% in the Americas and 5% in Asia but declined by 4% and 1.5% in Africa and in Oceania respectively while remaining essentially unchanged in Europe. The average world mine capacity utilization rate for the first quarter remains practically unchanged form that in the same period of 2015.
World refined production is estimated to have increased by about 5% (290,000 t) in the first quarter of 2016 compared with refined production in the same period of 2015: primary production was up by 5% and secondary production (from scrap) was up by 5.5%. The main contributor to growth was China (+10%), followed by the United States where production increased by 23%. Output in Chile and Japan, the second and third leading refined copper producers, increased by 5% and 6% 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 (9%), Asia (8%) and Oceania (14%) while declining in Africa (-16%) and in Europe (-3%). The average world refinery capacity utilization rate for the first quarter of 2016 increased to 85% from 83% in the same period of 2015. Based on the average of stock estimates provided by independent consultants, China’s bonded stocks increased by around 135,000 t in the first quarter of 2016 from the year-end 2015 level. Stocks increased by around 30,000 t in the same period of 2015. In the first quarter of 2016, the world refined copper balance adjusted for the change in Chinese bonded stocks indicates a production surplus of around 175,000 t compared to a similar surplus in the same period of 2015.
The average LME cash price for May was US$4,708.35 per tonne, down from the April average of US$4,851.12 per tonne. The 2016 high and low copper prices through the end of May 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$4,715.52 per tonne (14% below 2015 annual average). As of the end of May, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 430,477 t, a decline of 51,391 t (-11%) from stocks held at the end of December 2015. Compared with the December 2015 levels, stocks were up at the SHFE and down at LME and COMEX.