A 2.5% increase in apparent Chinese demand put the global refined copper market in a 50,000 mt deficit in 2016, according to preliminary data released Monday by the International Copper Study Group.
Adjusting for changes in Chinese bonded stocks, the deficit narrowed to about 42,000 mt, the Lisbon-based research group said in a report, adding that December saw a small surplus of 20,000 mt.
Global copper mine production last year grew an estimated 5%, or 1 million mt, to 20.15 million mt, with concentrate production increasing by 7% and solvent extraction-electrowinning (SX-EW) declining by 2%, according to ICSG data.
The mine production increase was due mainly to a 38% increase (650,000 mt) increase in Peruvian concentrate output that benefited from new and expanded capacity brought online in the last two years, the ICSG said.
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Additional factors included a recovery in production levels in Canada, Indonesia and the US, and expanded capacity in Mexico, as well as supply disruptions from strikes, accidents or adverse weather conditions.
"However, overall growth was partially offset by a 3.8% (220,000 mt) decline in production in Chile, the world's biggest copper mine producer, and a 4.5% decline in [the Democratic Republic of Congo], where output is being constrained by temporary production cuts," ICSG analysts said.
On a regional basis, production rose by 6% in the Americas and 11.5% in Asia but declined by 3.5% in Africa while remaining essentially unchanged in Europe and Oceania, they added.
World refined production is estimated to have increased by about 2.5% (530,000 mt) in 2016 to 23.40 million mt, with primary production (electrolytic and solvent extraction-electrowinning) increasing by 3% and secondary production from scrap declining by 2%.
"The main contributor to growth in world refined production was China (increase of 6%, or 470,000 mt), followed by the United States and Japan, where production increased by 7% and 5%, respectively, and by Mexico (16%) where expanded SX-EW capacity contributed to refined production growth," according to the ICSG.
"However, overall growth was partially offset by a 3% decline in Chile, the second world leading refined copper producer."
Although primary electrolytic refined production increased by 4.5%, electrowinning production declined by 6.5% due to definitive/temporary closures of SX-EW mines, ICSG analysts said.
Production in the DRC and Zambia also declined by an aggregated 11% mainly due to the impact of temporary production cuts.
On a regional basis, refined output is estimated to have increased in the Americas (1%) and Asia (6%) while declining in Africa (10%) and in Europe (including Russia) (2%) and remaining essentially unchanged in Oceania.
World apparent refined usage is estimated to have increased by around 2% (430,000 mt) in 2016 to just over 23.46 million mt, the ICSG said.
"Growth was mainly due to an increase in Chinese apparent demand, as world usage excluding China is estimated to have increased by only 0.9%. Chinese apparent demand (excluding changes in unreported stocks) increased by around 2.5% based mainly on 6% growth in refined production as in fact net imports of refined copper declined by 7.5%," ICSG analysts said.
Usage in the US and Japan, the second and third leading refined copper using countries, was down by 2% and 2.5% respectively.
On a regional basis, usage is estimated to have increased by 3% in Asia (excluding China, Asia usage increased by 3%) and by 2% in Europe (by 1.5% in the European Union), while declining by 3% in the Americas, the ICSG said.
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