Base Metals Preview: Copper Stays Largely Supported

28 Feb 2022 , 12:37 AM

COMEX Copper futures lingered around $4.50 per pound amid on Friday amid steady equities and broadly supportive demand trends. The International Copper Study Group (ICSG) released preliminary data for November world copper supply and demand in its February 2022 Copper Bulletin. Preliminary data indicates that world copper mine production increased by about 2.5% over the first eleven months of 2021, with concentrate production increasing by around 3.9% and solvent extraction-electrowinning (SX-EW) declining by about 3.6%. Mine production grew by around 2.5% in Jan-Nov 2021 but this compares to a low 2020 basis when the copper mining industry was severely impacted by the global lockdown. Production in Chile, the worlds largest copper mine producing country, was down by 2% over the period Jan-Nov 2021 with concentrate production falling by 1.3% and SX-EW output declining by 4% mainly at the Escondida mine. Preliminary data indicates that world refined copper production increased by about 1.3% over the first eleven months of 2021 with primary production (electrolytic and electrowinning) up by 0.7% and secondary production (from scrap) up by 4.7%. Preliminary official Chinese refined production data indicates growth of 4% over Jan-Nov 2021, however, y-o-y 3rd quarter production was up by only 0.9%. ICSG noted that world apparent refined copper usage grew by about 1% over the first eleven months of 2021. Over the first eleven months of 2021, the world refined copper balance, based on Chinese apparent usage (excluding changes in bonded/unreported stocks), indicated a deficit of about 340,000 t.

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