The International Copper Study Group (ICSG) released preliminary data for August 2011 world copper supply and demand in its November 2011 Copper Bulletin. Preliminary ICSG data for August 2011 indicate a production deficit of 45,000 metric tons (mt) as global refined usage rose by 6.8% from that in July—strong Chinese apparent usage (reported data only) more than offset seasonally weak usage in other regions—and refined production rose by only 2.5%. This runs contrary to the historic trend, where August refined copper market balances for nine of the last 10 years have shown an average annual production surplus of 60,000 mt owing to lower usage during the holiday period in the northern hemisphere. The apparent refined copper balance for the first eight months of 2011 indicates a production deficit of 161,000 mt (a seasonally adjusted surplus of 23,000 mt). This compares with a production deficit of 339,000 mt (a seasonally adjusted deficit of 145,000 mt) in the same period of 2010.

During the first eight months of 2011, world apparent usage grew by 1% compared with that in the same period of 2010. Although Chinese apparent usage grew by 13% in August, year-to-date apparent usage was 2.6% below that in the first eight months of 2010. Despite higher net imports in August of 235,000 mt, China’s net imports for the first eight months of 2011 were 33% lower than those for the same period in 2010. World usage in the first eight months of 2011 without China grew by 3%, owing primarily to significant increases in Russia (80%) and India (7%) apparent usage.

Growth in the United States and the EU has weakened as the year progressed, and in the first eight months of 2011, usage grew in these two regions by a modest 0.7% and 0.4%, respectively. Japanese usage, affected by the earthquake/tsunami, was down by 1.8% compared with that in the same period of 2010. On a regional basis, usage grew by 5% in Africa, 9% in Europe and 0.5% in Oceania, and declined by 0.1% in the Americas and 1.7% in Asia.

World mine production continued to underperform relative to capacity. During the first eight months of 2011, it remained practically unchanged compared with production in the same period of 2010: Concentrate production was unchanged and SX-EW grew by 1.2%. Production at three of the world’s four leading producers (Chile, Peru and the United States) that combined account for almost one half of the world’s production, was down by an aggregated 4%. However, production in China, currently the second leading producer, was up by 12%. On a regional basis, mine production increased by 4% in Africa, 3% in Europe and 11% in Oceania, but decreased by 0.8% in the Americas and 3% in Asia. The average mine capacity utilization rate for the first eight months of 2011 fell to 77.5% from 79% in the same period of 2010.

During the first eight months of 2011, world refined production grew by 2.5% compared with that in the same period of 2010: Primary production increased by 0.5% and secondary production (from scrap) increased by 12%. Production increases of 24% in Australia (recovery from 2010 operational constraints), 17% in China, and 34% in the Democratic Republic of Congo were partially offset by declines in Chile (-5%), the United Sates (-10.5%), Canada (-22%) and Japan

(-17.5%). The average refinery capacity utilization rate for the first eight months of 2011 was practically unchanged from that in the same period of 2010 at around 79%.

For more information on the copper market, visit the ICSG website www.icsg.org.

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