World demand for refined copper is expected to exceed
production of refined copper by about 240,000 metric tonnes
this year, according to preliminary International Copper Study
Group (ICSG) data.
This would mean 2012 will be the third consecutive year of
production deficit, while in 2013 increased output could
reverse the trend, the ICSG said
Based on initial projections, refined copper production
could exceed demand by about 350,000 tonnes [in 2013],
the study group said.
Though significant on a cumulative basis, the annual
deficits and current projected surplus for 2013 are relatively
small compared with the market size, it added.
The ICSG has included in its projections factors such as a
world economic slowdown, European sovereign debt issues,
political unrest in the Middle East and North Africa, and
production shortfalls owing to labour unrest.
The possibility of utility and capital shortages, and
technical factors creating significant uncertainty, and that
the global market balances could vary from those
projected, it said.
Apparent copper usage in China, the largest consumer of copper
globally, is based on reported data and does not look at
changes in unreported stocks, the ICSG said.
Levels of unreported stocks may be significant during periods
of stocking or de-stocking, and could have a major impact on
projected supply-demand balances, it added.
Operational constraints, lower head grades, adverse weather
conditions and labour unrest in 2011 hampered mine production
in 2011, the study group said, and in 2012, it is projected to
increase by about 5.1%, or 810,000 tonnes, to 16.9 million
Capacity utilisation rates are expected to improve from
79% in 2011 to an average of 81% in 2012. Growth in mine output
will mainly be from restoration of production at existing
operations rather than from new projects, the ICSG said.
While some expansions and start ups will occur in 2013
that will help boost mine production by 7.6% to 18.1 million
tonnes, deferrals and delays in projects have postponed most of
anticipated new supply to 2014 or later, it added.
In 2012, refined copper production is expected to be affected
by a shortage of concentrates, and is expected to increase by
about 2.5%, to reach 20.15 million tonnes.
In 2013, as concentrate availability improves, refined
production is expected to grow by 6.9%, the ICSG said.
Electro-won copper production and secondary refined production
are expected to grow by about 160,000 tonnes and 190,000
tonnes, respectively, in 2012, and by about 130,000 tonnes and
180,000 tonnes, respectively, the following year.
ICSG expects world apparent refined usage in 2012 to grow
by only 2.5% from that in 2011 to 20.4 million tonnes,
the study group said.
Demand growth in China is anticipated to slow to 3.6%; a
contraction in demand is expected for the EU; no growth is
foreseen for usage in Japan; and US usage is expected to grow
by 3.9%, it added.
For 2013, better macroeconomic conditions are expected to
generate copper demand growth of 3.9% on average. Chinese usage
is projected to increase by 4.9%, and the rest of the world by