Metal demand is likely to exceed supply, at least on paper, as most of the metals are in transit and have not reached buyers due to COVID-19 related shutdowns, according to the World Bureau of Metals Statistics (WBMS).
The association indicated that the true impact of COVID-19 on metals supply and demand would be visible only over the next few months, in its report on metals balances for the first quarter.
The global copper and nickel market recorded a surplus in the first quarter of the year. The copper market witnessed a surplus of 188,000mt in Q1 2020 compared to a full-year deficit of 268,000mt in 2019. The nickel market also recorded a surplus with production exceeding demand by almost 6,600mt as opposed to a full-year deficit of 17,900mt in 2019.
Copper market
WBMS reported global copper production in March this year at 2mn mt while demand was 1.95mn mt during the month.
In Q1 2020 global copper mine production increased by 8pc to 5.24mn mt compared to the Q1 2019 while global refined production was up by 8.1pc to 5.93mn mt from the same period in 2019. The rise was led by China and Chile where production rose by 243,000mt and 61,000mt, respectively. However, EU production declined by 5.8pc in Q1 2020 compared to Q1 2019.
Global copper demand in Q1 2020 was higher by almost 4pc to 5.74mn mt compared to 5.5mn mt in Q1 2019. Demand in China increased by 7.7pc in Q1 2020 to 2.86mn mt compared to Q1 2019, while demand in EU dropped to 810,000mt in Q1 2020.
Nickel market
Global nickel production in March 2020 was 169,000mt while demand was 175,300mt.
In Q1 2020 the global nickel mine production increased by 52,000mt to 595,900mt compared to the first quarter of 2019. The Chinese smelter/refinery production dropped by 4,000mt in Q1 2020.
From a demand standpoint, global nickel demand dropped by 3,000mt last quarter compared to Q1 2019. However, Chinese demand was up by 12,000mt to 243,900mt in Q1 2020 compared to the same period in the previous year.