The International Copper Study Group (ICSG) released preliminary data for world copper supply and demand in its June 2012 Copper Bulletin. The refined copper market balance for March 2012 showed a production deficit of 135,000 metric tons (mt). When making seasonal adjustments for world refined production and usage, March showed a production deficit of 119,000 mt. The apparent refined copper balance for the first quarter of 2012, including revisions to data previously presented, indicates a production deficit of 273,000 mt (a seasonally adjusted deficit of 236,000 mt). This compares with a production deficit of 13,000 mt (a seasonally adjusted deficit of about 61,000 mt) in the same period of 2011.

                During the first quarter of 2012, world apparent usage of copper grew by 9% compared with that in the same period of 2011, principally owing to strong growth in Chinese apparent usage. Based on a 99% increase in net imports of refined copper, China’s apparent usage grew by 32% in the first quarter compared with that in the first quarter of 2011 and accounted for 43% of world usage. However, comparative net imports levels in the first quarter of 2011 were weak and anecdotal evidence suggests the high import level in the first quarter of 2012 was accompanied by increased inventories held in bonded warehouses. Usage in the other three leading consuming regions, the EU, Japan and the U.S., declined by 9% and 6% and increased by 0.9%, respectively.

                In the first quarter of 2012, world mine production increased by 2% compared with production in the same period of 2011. Concentrate production declined by 0.7% while solvent extraction-electrowinning (SX-EW) was up by 12%. Increases in Chile (1%), China (28%), Democratic Republic of the Congo (27%), Mexico (38%) and the United States (5%) more than offset declines in Indonesia (56%) and Peru (1.6%). On a regional basis, production rose by 3.5% in Africa, 7% in Oceania, 2.7% in Europe and 2% in the Americas, but declined by 1.2% in Asia. The average world mine capacity utilization rate for the first quarter of 2012 decreased slightly to 76.8% from 77.2% in the same quarter of 2011.

                World refined production increased by 3.7% in the first quarter of 2012 compared with refined production in the same quarter of 2011: primary production was up by 3.7% (mainly due to an increase in electrowon production) and secondary production (from scrap) increased by 3.8%. The main contributors to growth were China (+9%) and Africa (+12%), although smaller growth rates were also seen in India (+7%) and Japan (+2.7%). The average world refinery capacity utilization rate for the first quarter of 2012 remained unchanged at around 78.4% when compared to the same quarter of 2011.

                The average LME cash price for May 2012 was $7,919.93/mt, down from the April average of $8,259.63/mt. The 2012 high and low copper prices through the end of May were $8,658/mt and $7,471/mt, respectively, and the average was $8,219.20/mt. As of the end of May, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totaled 442,803 mt, a decline of 101,808 mt from stocks held at the end of December 2011 and a decline of 72,459 mt from stock levels at the end of April 2012. Compared with the April levels, stocks were down at all three exchanges.

                ICSG’s June 2012 Copper Bulletin is available at: www.icsg.org.

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