Global Refined Copper Production and Consumption Trends Widen Surplus

Global production of refined copper rose by 4.1% year-on-year to 20.50 million tonnes during January to September, while consumption increased by 2.5% to 20.14 million tonnes. This resulted in a widening surplus of 359,000 tonnes for the first nine months of the year, compared to a surplus of just 42,000 tonnes during the same period in 2022, according to the International Copper Study Group (ICSG).

In September, however, the copper market experienced a deficit of 131,000 tonnes, a reversal from the surplus of 41,000 tonnes recorded in August. This shift came as global refined production dropped by 4% month-on-month to 2.22 million tonnes, while consumption rose by 3.6% to 2.35 million tonnes.

China, the world’s largest producer of refined copper, recorded a 5.5% increase in production from January to September, attributed to the commissioning and expansion of primary and secondary smelters. Production in the Democratic Republic of Congo rose by 13% over the same period, driven by the ramp-up of new or expanded electrowinning plants. Together, China and Congo accounted for about 54% of the world's refined copper production.

Conversely, output in Chile, another key copper producer, fell by 7.2% in the first nine months of the year due to a decline in primary electrolytic and electrowinning production. Japan's refined copper output increased by 3.3% over the same period. Globally, secondary copper production from scrap increased by 4.1% to 3.47 million tonnes from January to September.

Demand for copper from countries excluding China rose by 1.7% year-on-year, despite weak demand in the European Union, Japan, and the United States. This decline was offset by growing demand from several Asian, West Asian, and North African countries. Demand in China itself grew by 3%, 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 declined to 78.7% from 80.5% during the same period.

Copper inventories at major exchanges surged by 141% to 512,206 tonnes in October compared to stock levels at the end of December. On the London Metal Exchange (LME), the average cash price of copper rose by 3.1% to $9,539.24 per tonne in October, compared to $9,254.50 per tonne in September. As of 1000 IST November 21, the most-active three-month copper contract on the LME stood at $9,128.00 per tonne, marking a 0.4% increase from the previous close.