Warm weather and high inventories…
A wave of sub-zero temperatures…
Global copper mine production picked up by 4.9% during the first half of the year, the International Copper Study Group said this week.
Broken down further, concentrate production rose by 6.4% during the six-month period. Meanwhile, solvent extraction-electrowinning fell by 1.5%.
Chile, the world’s top copper producer, saw its copper production fall 1.2% during the first half of the year.
Meanwhile, Peru, the second-biggest copper producer, saw its output bounce back by 14% year over year. However, its half-year output remained down 9% from H1 2019 levels.
As a result of rising output at the Grasberg mine, Indonesia’s output rose by 69% year over year.
Meanwhile, on the refined side of the picture, production rose by 3.2% year over year, the ICSG reported.
“The COVID-19 related global lockdown has had a notable negative impact on the world economy and subsequently on key copper end-use sectors in all regions ex-China,” the ICSG noted. “Although usage started to recover in the 2nd half of 2020, global demand remains below pre-pandemic levels in most countries.”
Chinese apparent copper usage rose by 1.5% in H1 2021, the ICSG said.
China imported 424,280 tons of unwrought copper and copper products in July, the General Administration of Customs reported.
The total marked a decline from 428,437 tons in June.
Through the first seven months of the year, China imported 3.22 million tons of unwrought copper and copper products. The total marked a 10.6% decline from the first seven months of 2020.
However, market watchers are monitoring the economic climate in China, particularly amid concerns over the collapse of indebted Chinese real estate developer Evergrande.
Markets slumped Wednesday amid the news; however, it remains to be seen how Beijing will address the crisis.
The S&P 500 fell 1.7% on Wednesday, while the Dow Jones Industrial Average fell 1.78% and the FTSE 100 fell 0.86%.
As the largest consumer of copper, a slowdown in the Chinese economy would be massively depressive for copper prices, just as Chinese copper demand fueled the metal’s price rises throughout 2020.
Copper prices have had a topsy-turvy month or so, plunging to around $8,780 per metric ton Aug. 21.
However, the LME three-month price recovered, rising to $9,640 per metric ton as of Sept. 13.
In the last week, though, the price has come back down, closing last week at $9,457 per metric ton.
As readers of the MetalMiner Monthly Metal Outlook (MMO) know, the Caixin China General Manufacturing PMI fell to 49.2 in in August. The August PMI marked the first contraction in Chinese factory activity since April 2020.
By AG Metal Miner
More Top Reads From Oilprice.com:
MetalMiner is the largest metals-related media site in the US according to third party ranking sites. With a preemptive global perspective on the issues, trends,…