According to figures published this week by the International Copper Study Group, mine production rose by 2.7% in the first half of this year compared with the same period last year. Production rose significantly in the Democratic Republic of Congo (9.5%) and Mongolia (31%) in particular, due to expanded mining capacity in these countries. In Peru (3.6%) and Chile (2.6%), production rose more slowly but still remained robust. In Indonesia, however, production had to be significantly reduced due to planned maintenance at a large mine, Commerzbank’s FX analyst and commodity Volkmar Baur notes.
Shortage of raw Copper is likely to have worsened further
“Nevertheless, refined Copper production once again grew faster than mine production. Thanks to increases of 6.5% in the Democratic Republic of Congo and 6% in China, global production rose by 3.6%, even though growth in the rest of the world was only 0.6% and production in Chile actually fell by 8.4%.”
“However, estimated consumption of refined Copper rose even more strongly, at +4.8%, driven by China (+7.5%), which accounts for around 58% of global demand for Copper. In the rest of the world, however, demand rose at a much slower pace of +1%, while demand in Japan, the EU and the US actually declined. According to ICSG data, the global Copper market showed a supply surplus of 251 thousand tons in the first six months of the year. This was significantly lower than in the same period last year, when the surplus amounted to 395 thousand tons.”
“Data from China’s National Bureau of Statistics for July indicate that these developments have continued. While problems in mine production were recently reported in Chile, refined Copper production in China rose by double digits year-on-year in July. The shortage of raw Copper is therefore likely to have worsened further.”
