Refined copper market balance for Sept-2010 at 80,000 MT: ICSG

LISBON, PORTUGAL （Commodity Online）: According to preliminary ICSG （International Copper Study Group） data for September 2010, the refined copper market balance for that period indicated a production deficit of about 80,000 metric tons.

When making seasonal adjustments for world refined production and usage, September showed a deficit of 60,000 tons. The apparent refined copper balance for the first nine month of 2010, including revisions to data previously presented, indicates a production deficit of 436,000 tons （a seasonally adjusted deficit of 179,000 tons）, a press release indicated.

This compares with a production deficit of around 55,000 tons （a seasonally adjusted surplus of about 184,000 tons） in the same period of 2009. Contrary to ICSG predictions in September, 9-month data indicate that the global market balance for the full-year 2010 is likely to show a significant deficit owing to stronger than anticipated demand growth.

World mine production in the first three quarters of 2010 continued to underperform, growing by a modest 0.8% （100,000 tons） when compared to production in the same period of 2009: concentrate production grew by 0.7% while solvent extraction-electro winning （SX-EW） grew by 1.7%.

Production in Chile was up by 1.5% from its low level during the same period of 2009, but output from, Peru, the United States, Australia and Indonesia decreased by an aggregated 7.5% （245,000t）.

These four countries represent around 25% of total world copper mine production. The mine capacity utilization rate in the first nine month of 2010 （79.7%） was down from the already low comparative rate in 2009.

During the first nine month of 2010, world refined production increased by 5% （705,000 tons） compared with production in the same period of 2009: primary production increased by 1.9%, while secondary production （from scrap） increased by 24.5%.

Note that the large relative increase in secondary refined copper production reflects in part the lower copper prices and consequent tight scrap market that existed in early 2009. World refined production growth has been mainly driven by China （15%）, Japan （9.5%） and the EU （8%） that combined represent almost one half of world refined copper production.

Production in two other major world refiners, Chile and the United States, which account for about one quarter of world production, decreased by a combined 2.6%. The refined production capacity utilization rate in the first nine month of 2010 increased to 79.7% from 77% in the same period of 2009 and reflects increased scrap availability and the restoration of temporary cuts made in early 2009.

During the first nine months of 2010, world apparent usage grew by 8% （approximately 1.09 million metric tonnes） compared with that in the same period of 2009, principally owing to recovery from weak 2009 usage levels in the European Union （EU）, Japan and the United States, where usage grew by 11%, 27%, and 7.%, respectively.

Although these year-on-year growth rates are strong, usage in the EU, Japan and United States remained well below pre-crisis levels （below Jan-Sep 2008 levels by 16%, 14%, and 16% respectively）.

In the first 9 months of 2010, Chinese apparent usage increased by a more modest 4.5% from the very strong 2009 apparent usage level.

The average LME cash price for November 2010 was US$ 8,469.89 per ton, up from the October 2010 average of US$ 8,292.40 per ton. The 2010 high and low copper prices through the end of November were $8,925.00 and $6,091.00 per ton, respectively, and the average was $7,393.78 per ton.

As of the end of November 2010, copper stocks held at the major metal exchanges （LME, COMEX, SHFE） totalled 542,522 tons, a decrease of 145,169 tons from stocks held at the end of December 2009.