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Copper surplus at 50,000T in April: ICSG

Keywords: Tags  Copper, surplus, production, consumption, usage, International Copper Study Group, ICSG

NEW YORK — The global copper market showed a 50,000-tonne surplus in April due to weak apparent refined demand in major consuming regions, according to a report from the International Copper Study Group (ICSG).

Refined copper production totaled almost 1.78 million tonnes in April compared with global usage of almost 1.73 million tonnes, according to the ICSG data.

For the first four months of 2013, the market was in a 266,000 tonne surplus as world mine production increased by almost 9 percent compared with production in the 2012 period “mainly owing to a recovery in production levels from constrained output in early 2012,” according to the ICSG.

Meanwhile copper usage decreased by 4 percent compared with the same 2012 period, the ICSG report said.

Chinese apparent demand declined by 7 percent in the first four months of the year owing to a 45 percent decline in net imports of refined copper, the ICSG said.

World refined copper production increased 6 percent year over year in the first four month, with increased output in the Democratic Republic of Congo (40 percent), Zambia (21 percent) and China (14 percent). Production declined by 6 percent in Chile, the world’s largest refined copper producer.

Second quarter production results from major producers have indicated output strength at key copper mines, Barclays Capital analysts said in a July 19 report.

"So far, corporate results indicate that production strength at key copper mines continued in (the second quarter), with guidance suggesting mounting upside risk to (second half) output.," the analysts said in the report.

Production results from Anglo American Plc., BHP Billiton Plc. and Rio Tinto Plc. were cited as examples of “very strong (year- over- year) production growth and positive guidance” by the analysts.

Anglo American’s copper production grew 14 percent year over year in the second quarter (, July 19), BHP Billiton saw a 7- percent growth in copper production (, July 17), and Rio Tinto produced 10 percent more copper year over year (, July 16).

Rio Tinto in particular improved because of a “quicker recovery than expected” at Kennecott after the wall slide in April, Barclays said.

The production results to date "suggest confidence and even upside risks" to Barclays forecast of 3.1 percent growth in the global copper mine output in 2013 to 17.2 million tonnes, the analysts said. Barclays estimates copper production in the second half of 2013 of 8.74 million tonnes.

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