The following is an edited summary released by the International Copper Study Group (ICSG), which met in Lisbon in March. The group includes delegates and advisors from the world’s major copper producing and consuming nations, who developed the ICSG copper forecast below. For more information visit www.icsg.com.
The copper market is expected to stay balanced in 2016 and 2017. This compares with a small 127,000-tonne deficit and a 175,000-tonne surplus for 2016 and 2017, forecast at ICSG’s October 2015 meeting. Downward revisions have been made for both production and usage in view of global weaker economic outlook, and project delays and price-related production cuts.
In developing its projections, ICSG recognizes that global market balances can vary from those projected owing to numerous factors that could alter projections for both production and usage. In this context it can be noted that actual market balance outcomes have recently deviated from ICSG market balance forecasts due to unforeseen developments. World mine production after adjusting for historical disruption factors is expected to increase 1.5% in 2016 (lower than the 3.5% growth in 2015) to reach 19.4 million tonnes. While concentrate production could grow 4%, growth will be partly offset by a decline in solvent extraction–electrowinning (SX–EW) production due to price-related production cuts in the Democratic Republic of the Congo and closures in Chile. Higher 2.3% global mine production growth is expected in 2017, with more supply from operational expansions, ramped-up production from mines recently coming on-stream and output from a few new mine projects.
After increasing 1.6% in 2015, world refined copper production in 2016 could increase only 0.5% to 23 million tonnes. Although primary refined production (excluding SX–EW) is expected to grow 3%, growth will be partly offset by an anticipated 1% decline in secondary production (from scrap) and an 8% decline in SX–EW output. For 2017, world refined production is expected to grow 2%, benefitting from a 7% growth in SX–EW output. China will be biggest contributor to world growth in both years.
ICSG expects that world apparent refined usage this year will stay flat. Apparent demand in China is likewise expected to remain essentially flat (+0.5%), although underlying “real” demand growth in China is an estimated 3–4%. Usage in the rest of the world in 2016 could stay practically unchanged. For 2017, world apparent refined usage could grow 1.8%, with underlying Chinese industrial demand growth expected at 3%, while usage in the rest of the world is expected to increase 1%.