Copper output steady, but secondary share down

Statistics gathered by the Lisbon, Portugal-based International Copper Study Group (ICSG) indicate world refined copper production increased by 1.2 percent in the first eight months of 2020 compared with the same time frame in 2019.

While primary production rose by 2.5 percent, however, scrap-fed secondary production output fell by 5 percent in the January-to-August period of 2020 compared with last year.

“Globally, constrained scrap supply due to the COVID-19 lockdown and lower copper prices during the first half of the year have negatively impacted world secondary refined production,” states ICSG in its November 2020 Copper Bulletin.

The pattern may have been different within the United States, even with tight scrap supplies, since “temporary shutdowns and a long strike at Asarco’s operations led to a 13 percent decline in refined output” at that Arizona facility, notes ICSG.

In China, once a major buyer of red metal scrap from the rest of the world, ICSG writes, “Refined production growth was negatively impacted by temporary shutdowns related to COVID-19 restrictions, tight scrap supply and constraints associated with concentrate imports and oversupply in the sulphuric acid market.”

The consumption of copper may have been slightly behind the global 1.2 percent increase, with ICSG saying its figures point to global refined copper usage increasing by 1.0 percent during the first eight months of 2020 compared with 2019.

“The COVID-19-related global lockdown has had a significant negative impact on the world economy and subsequently on key copper end-use sectors in all regions,” writes ICSG, which also points to China as an exception.

While outside of China “refined copper usage was significantly impacted and is estimated to have declined by about 10 percent,” says the association, in China there was “a 48 percent (940,000 metric tons) increase in net refined copper imports, [and] Chinese apparent usage increased by 12.5 percent, offsetting the declines in other regions of the world.”

Factoring a drop in mining output globally, the ICSG calculates that during the first eight months of 2020, “the world refined copper balance indicated a deficit of about 293,000 metric tons,” potentially rising to 296,000 metric tons “adjusted for changes in Chinese bonded stocks.”