Thursday, March 27, 2008; Posted: 12:33 PM
The world refined copper market was in a 40,000-metric-ton deficit in 2007, from a surplus of 290,000 tons in 2006, a report Thursday by the International Copper Study Group said.
The deficit of about 300,000 tons in the first half of the year was mostly offset by a surplus of around 260,000 tons in the second half of the year, ICSG said.
In December, lower holiday-period usage in the U.S. and the European Union, as well as lower usage in Japan and China, resulted in a large apparent monthly surplus of around 125,000 tons.
World refined copper consumption is estimated to have increased by 6.5% in 2007 compared with 2006, with growth driven by China.
In China, apparent copper consumption grew by 36% as net imports of refined copper rose by 134% to about 1.4 million tons. ICSG noted that China's apparent copper usage is based on production, trade and Shanghai warehouse stock data, and does not take into account changes in unreported stocks.
World copper usage outside of China decreased by around 1.4% with consumption in the other three major consuming regions - the U.S., the E.U.-15 countries and Japan - decreasing by around 3.3%. Copper consumption in the rest of the world increased by 1%, ICSG said.
Global reported inventories declined by about 90,000 tons, also indicating a production deficit of well below 1% of copper usage, ICSG added.
World copper mine production meanwhile increased by 3% in 2007 compared with the same period of 2006: concentrate production was up by 2% and SX-EW production was up by 8%.
"Like 2006, when significant technical disruptions to production resulted in limited production growth, production in 2007 did not keep pace with capacity growth," ICSG said, nothing that this was mainly due to disruptions from labor unrest.
As a result, the average global copper mine capacity utilization rate fell slightly, to about 87.5%.
Total world refined copper production increased by 4.5% in 2007 compared with refined production in 2006: primary production was up by 4%. The biggest share of refined copper production growth was attributed to SX-EW production, while secondary production from scrap was up by 7.5%.
China was the biggest contributor to refined copper production growth (18%) due to the expansion of its copper refinery capacity. Other major contributors were Chile (4%), India (15%) and the U.S. (6%).
-By Andrea Hotter, Dow Jones Newswires: +44 (0) 20 7842 9413; andrea.hotter@dowjones.com
(END) Dow Jones Newswires
03-27-08 1233ET
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