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Over supply to cause worries for Dr. Copper

Global copper mine production is risen by more than 5% in the first six months of 2016 as compared to the same period last year. This year the copper mine production is expected to increase on amount large mine expansion in Peru Canada U.S. etc. Refined consumption has also risen by 5% on higher copper and copper concentrate imports and higher demand from United States.

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Peru is the second largest copper producer in the world. Peru is rapidly increasing its copper output by expanding its output at most of its mine. Five major copper mines are expected to increase its copper output from 1.3 million tonnes to 2.5 million tonnes which is a rise of almost 50 percent in 2016. Copper output has increased at Cerro Verde, Las Bambas, Toromocho, Constancia and Antamina. Las Bambas mine is expected to deliver 400,000 tons by 2017. Peru aims on becoming the second largest copper producer in the world. Currently, Peru is the third largest producer in the world behind Chile and China.

Chile’s refined copper production has fallen 5.2% YoY (year-over-year) in the first seven months of 2016—compared to the same period last year. The country has been facing lot of troubles in mining due to labour issues and floods and low grade copper.

Though later in the years, Chile plans to increase its copper output to 8.50 million tons in the next five years, and about 33% of global large mining projects will be executed in Chile, said Chile Foreign Investment Committee’s deputy director.

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Soure: NBS CHINA                                                                                         China copper production

While copper production has continued to increase in China in 2016. Production has risen 8% YoY in the first eight months of the year. The country imports has also remained higher on year on year basis and concentrate imports have also risen by a large percentage. China’s copper concentrate imports rose 34% YoY as the country processes the concentrate domestically. TC/RC charges have also showed a similar trend. It has risen $105 per tonne in 2016 up from $95-100 per tonne in 2015. The increase in treatment and refining charges tells us there is higher mine production in the market increasing the demand for refining.

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China’s copper refined imports have risen by 16 percent on year on year basis. China’s copper ore and concentrate imports have jumped 34.6 percent for the first eight months of 2016 to 10.86 million tonnes. Higher Chinese copper exports have also kept pressure on copper prices this year. The country’s copper exports have also been rising over the last few months first time in history in an already over supplied market.

Copper fundamentals have remained bearish sine last year on account of over supplied market and slowdown in China and construction demand. Rising supply fro the third largest producer have contributed to the fall in copper pries. Copper pries will continue to remain under selling pressure in the fourth quarter of 2016.

Categories: Commodity Market News Copper Updates International Commodity News

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CommTathya Team

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