Copper mine production decreased by 0.7pc in 2019 to 20.43mn mt from 20.57mn mt during the previous year, according to the International Copper Study Group (ICSG).
Lower copper head grades and production disruptions due to external factors led to a 1pc decrease in copper output from Chile—one of the biggest copper mining nations—in 2019, the ICSG data indicated. Declines in Chile, along with production decreases in other major copper producing countries, such as Indonesia (45pc decline), the Democratic Republic of Congo (3pc decline), and Zambia (3pc decline), offset gains made by other copper producing nations, notably the US, Australia, Canada, China, Mexico, and Peru.
In 2019, the ICSG data revealed a net refined copper deficit of around 340,000mt. However, when adjusted for Chinese bonded stock, the global copper deficit increased to 520,000mt. Copper prices were also pegged around 2pc lower in 2020 compared with 2019, averaging around $5,570-6,300.5/mt through January and Februrary.
ICSG noted that refined copper output also declined by 0.6pc to 23.94mn mt in 2019 from 24.09mn mt during the previous year, as refinery capacity utilization decreased to 83.1pc from 86.4pc in 2018.
Breaking down the reduction in refined production, the data indicated smelter shutdowns for upgrades in Chile resulted in a 22pc decline in the country’s electrolytic refined copper output. However, power supply interruptions, smelter outages and the introduction of a 5pc custom tax on refined copper in January 2019, resulted in a 40pc decrease in Zambia’s refined copper output.
The shutdown of Vedanta’s Tuticorin smelter in 2018 impacted India’s refined copper production, which decreased by 24pc in 2019. Smelter shutdowns and operational limitations also resulted in copper output declines in Japan, Peru, the US, and the EU.
However, growth in output in China, Australia, Brazil, Iran, and Poland helped balance the overall drop in refined copper production.
Higher Chinese refinery output also meant that the metal’s apparent usage in the country grew by 2pc, despite a 7pc drop in Chinese refined copper imports. Refined copper demand also increased in the US and India, but declined in the EU and Japan.