Global Copper Surplus Quadruples in Early 2024
In the first half of 2024, the global surplus of refined copper surged dramatically, quadrupling compared to the same period in the previous year, according to preliminary data from the International Copper Study Group (ICSG). The surplus expansion was driven by a significant increase in both copper mine production and refined copper output. Global mine production rose by 3.1% during this period, with major contributions from Chile, Indonesia, the United States, and the Democratic Republic of the Congo (DRC). Chile, the world's leading copper producer, saw a 2.4% increase in output, though it remained below its five-year average. Meanwhile, Indonesia and the US posted notable recoveries from operational setbacks in 2023, with production increases of 33% and 10%, respectively.
The refined copper output also experienced a notable uptick, growing by 6.2% in the first six months of 2024. This increase was largely fueled by expanded capacity in China and the DRC, which together account for over half of the world's refined copper production. In China, the growth of approximately 7% in refined copper output was attributed to the startup and expansion of various smelters and refineries, including those processing scrap copper. The DRC's refined production climbed by 12%, supported by the ramp-up of new and expanded electrowinning plants. Additionally, the US and Japan also contributed to the surge, with production increases of 15% and 3.7%, respectively.
On the demand side, the world’s apparent refined copper usage grew by about 3.3% during the same period, although this growth was uneven across different regions. China's demand increased by 3.5%, supported by a 9% rise in net refined copper imports, despite a significant boost in its exports. Outside China, global copper usage grew by approximately 3%, with demand weaknesses in the European Union, Japan, and the US being counterbalanced by stronger demand in other Asian countries.
The combination of strong supply recovery and moderate demand growth has led to a substantial widening of the refined copper surplus. The preliminary surplus for the first half of 2024 is estimated at 488,000 tonnes, a significant jump from the 115,000 tonnes recorded during the same period in 2023. When adjusted for changes in Chinese bonded stocks, the surplus is even larger, at around 573,000 tonnes, highlighting the significant shift in the global copper market dynamics. This growing surplus suggests that the second half of 2024 will need to see considerable changes to align with ICSG's earlier forecast of a 162,000-tonne surplus for the entire year.
