Global Copper Production and Consumption Trends Highlight Growing Surplus

Global refined copper production increased by 5.1% year-on-year to 18.33 million tonnes from January to August 2024, while consumption rose by 2.5% to 17.8 million tonnes, the International Copper Study Group (ICSG) reported on Tuesday. This growing gap between production and consumption led to a surplus of 535,000 tonnes, up significantly from the 75,000-tonne surplus reported during the same period last year.

The surplus in the copper market narrowed slightly in August, falling to 54,000 tonnes from 73,000 tonnes in July. In August, global refined copper production grew by 0.2% month-on-month to 2.32 million tonnes, while consumption increased by 1.1% to 2.27 million tonnes, according to the ICSG.

Production in China, the world's largest producer of refined copper, rose by 6.5% year-on-year from January to August, driven by the commissioning and expansion of primary and secondary smelters and refineries. The Democratic Republic of Congo also experienced a 16% increase in production during the same period, attributed to the continued ramp-up of new or expanded electrowinning plants. Combined, China and Congo account for approximately 54% of global refined copper production.

In contrast, production in Chile, another major copper producer, fell by 7% in the first eight months of the year compared to 2023, largely due to a decline in primary electrolytic and electrowinning output. Japan's refined copper production, however, grew by 3.8% year-on-year. Additionally, global secondary production from scrap increased by 4.6%, reaching 3.1 million tonnes during the same timeframe.

Demand for copper outside of China grew by 2% year-on-year, despite weak demand in the European Union, Japan, and the United States. This decline was offset by growth in several Asian, West Asian, and North African countries. Meanwhile, demand from China itself grew by 2.7%, the ICSG reported.

The average monthly global copper mine capacity rose to 2.37 million tonnes, up from 2.28 million tonnes a year ago. However, the mine utilization rate fell to 78.3%, down from 80% during the same period.

Copper stocks at major exchanges surged by 134%, reaching 500,278 tonnes in September compared to stock levels at the end of December. On the London Metal Exchange (LME), the average cash price for copper increased by 3.2% in September, reaching $9,254.50 per tonne, up from $8,963.71 in August. As of 13:55 IST, the most-active three-month copper contract on the LME was priced at $9,618.00 per tonne, marking a 0.6% increase from the previous close.