The International Copper Study Group (ICSG) last week released preliminary data for July 2013 world copper supply and demand in its October 2013 Copper Bulletin. The Bulletin is available for sale upon request. According to preliminary ICSG data, the refined copper market balance for July 2013 showed a production deficit of 151,000 t. Although world refined production continued its gradual increase, Chinese apparent refined demand in July reached a record high monthly level due to high net refined copper imports.

After making seasonal adjustments for world refined production and usage, July showed a deficit of 150,000 t. The refined copper balance for the first seven months of 2013, including revisions to data previously presented, indicates a production deficit of 93,000 t (a seasonally adjusted surplus of 65,000 t). This compares with a production deficit of 552,000 t (a seasonally adjusted deficit of 394,000 t) in the same period of 2012.

In the first seven months of 2013, world usage is estimated to have increased by 1.6% (190,000 t), compared with that in the same period of 2012. Despite July’s high level, Chinese apparent demand in the first seven months only increased by 2.3% from that in the same period of 2012 as a result of a 25% decline in net imports of refined copper. However, anecdotal evidence suggests that the lower import level was accompanied by a decline in unreported inventories held in bonded warehouses in China, which may have been all or partially directed to domestic industrial use. (In its April 26 forecast press release ICSG said that unreported inventories in China were estimated to have risen by about 600,000 t during 2012.) Excluding China, year-on-year world usage increased by 1%, with growth in the US and Russia offsetting the decline in Japan and the European Union. On a regional basis, usage is estimated to have declined by around 3.6% in Africa and 4.7% in Oceania and to have increased by 4.2% in the Americas, 1.2% in Asia and 1.5% in Europe.

World mine production is estimated to have increased by 8.6% (800,000 t) in the first seven months of 2013 compared with that in the same period of 2012, mainly owing to a recovery in production levels from constrained output in early 2012. Concentrate production increased by 10% (720,000 t) and SX-EW by 4% (80,000 t). Mine production increased by around 7% in Chile, the world’s leading producer, and accounted for 32% of world mine production. On a regional basis, production rose by around 30.2% in Africa, 6.6% in the Americas, 8.7% in Asia, 2.5% in Europe, and 7.9% in Oceania. The average world mine capacity utilisation rate for the first seven months of 2013 increased to around 82% from around 79% in the same period of 2012.

World refined production is estimated to have increased by around 5.6% (650,000 t) in the first seven months of 2013 compared with refined production in the same period of 2012: primary production was up by around 4.5% (420,000 t), and secondary production (from scrap) increased by 11% (230,000 t). The main contributor to growth was China, where production increased by15.2% (about 500,000 t). Production also increased significantly in Brazil (72%), the DRC (41%), and Zambia (14%). However, due to smelter maintenance and other temporary shutdowns, refined production declined by 5.8% in Chile, the world’s second largest refined copper producer, 25% in India, 2% in Japan, and 10% in Scandinavia. On a regional basis, refined production is estimated to have increased in Africa (24.5%), Asia (8.5%) and the Americas (+1.2%) and remained unchanged in Oceania and Europe. The average world refinery capacity utilization rate for the first seven months of 2013 improved slightly to 78.6% from 78.2% recorded for the same period a year ago.

The average LME cash price for September 2013 was $7,161.43/t, down from the August 2013 average of $7,182.26/t. The 2013 high and low copper prices through the end of September were $8,242.50 (on 5 Feb) and $6,637.50/t (on 24 June), respectively, and the annual average was $7,379.21/t. As of the end of September, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 712,532 t, an increase of 123,110 t from stocks held at the end of December 2012 and a decline of 66,915 t from stock levels at the end of August 2013. Compared with the August levels, stocks were down at all three exchanges.

In developing its global market balance, ICSG uses an apparent demand calculation for China, the leading global consumer of copper, accounting for about 40% of world demand. Apparent copper demand for China is based only on reported data (production + net trade +/- SHFE stock changes) 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 and which could significantly alter supply-demand balances. www.icsg.org