Mine production in Chile, the world’s largest copper producer, rose 2.4 percent in the six-month period but is still 4.5 percent below the average first-half production level of the past five years, according to ICSG data.
Indonesian production increased 33%, recovering from operational restrictions at the Grasberg and Batu Hijau mines caused by significant rainfall and landslides in the first quarter of 2023. In the US, however, production growth is expected to be 10%, mainly due to a recovery from reduced production in the first half of 2023.
Production in the Democratic Republic of Congo increased by approximately 8.5%, reflecting the expansion of the giant Kamoa mine and new and/or expanded capacity at other smaller mines.
More copper
Accordingly, production of refined copper, which is obtained from the processing of ores, also rose by 6.2 percent in the first half of the year. According to ICSG, this was mainly due to strong performance in China and the Democratic Republic of Congo due to expanded capacities. Both countries are said to account for around 53 percent of global refined copper production, according to ICSG data.
Chinese refined oil production is expected to have increased by about 7% due to the start-up.
Expansion of a number of primary and secondary (from scrap) smelters and refineries, while production in the Democratic Republic of Congo increased by 12% due to the continued ramp-up of new and expanded electrowinning (SX-EW) plants.
Refined copper production also rose sharply in other major markets such as Japan and the US, where it grew by 3.7% and 15%, respectively. The increase in the US was mainly due to the production reduction in May 2023 caused by a maintenance shutdown at the Kennecott smelter.
Uneven demand
On the demand side, preliminary data from ICSG indicate that global refined copper consumption increased by about 3.3% in the first half of 2024, with demand growth uneven across regions.
China’s apparent demand (excluding changes in uncommitted/unreported inventories) grew by around 3.5%. Net imports of refined copper rose by 9%, despite a sharp increase in refined copper exports of 74%.
Outside China, global usage increased by about 3% as weak demand in the EU, Japan and the US was offset by growth in a number of Asian countries.
Growing surplus
Given the recovery in supply and modest demand growth in the first six months of 2024, the global refined copper balance, based on China’s apparent consumption, showed a provisional surplus of about 488,000 tonnes, well above the 115,000 tonnes calculated for the first half of 2023.
Adjusted for estimated changes in China’s stockpiles of customs stocks, for which data were provided by two consultants with expertise on the Chinese market, the market surplus would be even larger, at about 573,000 tonnes, according to the ICSG report. This is again much more than the 150,000 tonnes for the first half of 2023.
Previous forecast
These preliminary data from ICSG suggest that a lot will have to change in the second half of the year to meet the group’s previous forecasts for 2024.
In April, the ICSG forecast a surplus of about 162,000 tonnes for the calendar year, calculated from projected growth of 2.8 percent in refined copper production and two percent in global copper consumption.
Global mine production was also revised downwards to 0.5% from 3.7% due to the slow ramp-up of a number of projects, delays in project commissioning, revised company production guidelines and the closure of First Quantum’s 380,000 tonnes per annum Cobre Panama mine.
