The International Copper Study Group (ICSG) released preliminary data for June 2019 world copper supply and demand, which indicates that world mine production declined by about 1.4% in H1 2019, with concentrate production declining by 1% and solvent extraction-electrowinning (SX-EW) by 3.5%.

Reduced output in two major countries, namely Chile and Indonesia, more than offset growth in other countries. Production in Chile, the world’s largest copper producer, declined by 2.5%, mainly due to lower head grades. Concentrate production in Indonesia declined by 55% as the country’s two major mines transitioned to different ore zones leading to temporarily reduced output levels.

After aggregated growth of 13% in 2018, production in the Democratic Republic of Congo (DRC) and Zambia remained essentially unchanged in the first half of 2019 as temporary reduced production at some mines offset ramp-up output at other operations. Production in Peru (the world’s second largest copper producer), Australia, China and Mongolia increased due to improved grades and recovery from constrained output in 2018. On a regional basis, mine production is estimated to have increased by around 2% in North America and 7% in Oceania, but declined by 6% in Asia, 1% in Latin America, 3% in Europe and remained essentially flat in Africa.

Preliminary data indicates that world refined production declined by about 1% in H1 2019 with primary production (electrolytic and electrowinning) declining by 1.5% and secondary production (from scrap) increasing by 1%.

The fall in world refined production was mainly due to a 38% decrease in Chilean electrolytic refined output due to temporary smelter shutdowns while undergoing upgrades to comply with new environmental regulations. Total Chilean refined production (including electrowinning) declined by 15%.

India’s production, which was negatively impacted by the shutdown of Vedanta’s Tuticorin smelter in April 2018, declined 33%. Zambian refined output decreased 28% due to power supply interruptions, smelter outages and constrained concentrate imports due to a 5% customs duty introduced in January 2019.

On a regional basis, refined output is estimated to have increased in Asia (2%) and in Oceania (15%), but declined in Africa (-9%), the Americas (-10%) and in Europe (-1%).

Preliminary data indicated that world apparent refined usage declined by about 1% in H1 2019. During that period, the world refined copper balance, based on apparent Chinese usage (excluding unreported/bonded stocks), indicated a deficit of about 220,000 metric tons (mt). The world refined copper balance adjusted for changes in Chinese bonded stocks indicated a market deficit of around 190,000 mt.

As of the end of August, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totaled 519,745 mt, an increase of 169,249 mt (+48%) from stocks held at the end of December 2018.

The 2019 high and low copper prices through the end of August were $6,572/mt (on March 1) and $5,647/mt (on the August 5), respectively, and the year average was $6,076.72/mt (6.8% below the 2018 annual average).