The world has more refined copper than it needs right now. In the first half of 2024, the surplus of refined copper—copper that has been mined and then processed—quadrupled compared to the same time last year. This massive increase is due to a rise in copper production as mines around the world ramped up output after overcoming some past challenges.
What’s Causing the Copper Overflow?
Data from the International Copper Study Group (ICSG) shows that global copper mine production went up by 3.1% from January to June 2024. This recovery was mainly driven by mines in Chile, Indonesia, the United States, and the Democratic Republic of the Congo (DRC).
Chile, the biggest copper producer, saw a modest increase of 2.4% in output, although it’s still below its average production over the last five years. Indonesia made a huge comeback with a 33% increase in copper production after facing weather-related disruptions in early 2023. In the U.S., production bounced back by 10% after a tough first half of 2023, and the DRC saw an 8.5% increase thanks to the expansion of several mines, including the giant Kamoa mine.
Refined Copper Production is Booming
Refined copper production—the process of purifying mined copper ore—also saw a big jump, up 6.2% in the first half of the year. This growth was mainly fueled by expanded capacities in China and the DRC. Together, these two countries now account for more than half of the world’s refined copper production.
In China, refined copper output rose by about 7%, boosted by new smelters and refineries. Meanwhile, in the DRC, refined copper production grew by 12% due to new and improved processing plants. Other major players like Japan and the U.S. also saw increases of 3.7% and 15%, respectively, in refined copper production.
Uneven Demand Across the Globe
While copper supply is booming, demand has been more uneven. Global demand for refined copper grew by about 3.3% in the first half of 2024. China’s demand went up by 3.5%, and the country increased its net imports of refined copper by 9%. However, in other parts of the world, like the EU, Japan, and the U.S., demand has been weaker.
The Growing Surplus
With more supply and modest demand, the global surplus of refined copper hit 488,000 tonnes in the first half of 2024, much higher than the 115,000-tonne surplus recorded in the same period last year. When adjusting for changes in China’s stockpiles, the surplus is even larger, reaching around 573,000 tonnes.
What’s Next for the Copper Market?
These figures suggest a challenging outlook for the rest of the year. Back in April, the ICSG had forecasted a much smaller surplus of 162,000 tonnes for 2024. For this to happen, the market would need to adjust significantly in the coming months. The forecasts were based on expectations of a smaller increase in refined copper production and a steady rise in global copper usage. However, with the surplus already much larger than anticipated, the copper market could be in for a bumpy ride as the year continues.
Source: Mining.com
