LISBON (Commodity Online) : The International Copper Study Group (ICSG) released preliminary data for October 2010 world copper supply and demand in its January 2011 Copper Bulletin. During the first 10 months of 2010, world apparent usage of copper grew by 7.5% (approximately 1.1 million metric tons) compared with that in the same period of 2009, principally owing to recovery from weak 2009 usage levels in the European Union (EU), Japan, and the United States, where usage grew by 11%, 24%, and 7%, respectively. Although these year-on-year growth rates are strong, usage in the EU, Japan and United States remained well below pre-crisis levels (below Jan-Oct 2008 levels by 15%, 14%, and 16%, respectively). In the first 10 months of 2010, Chinese apparent usage increased by a more modest 3.6% from the very strong apparent usage level during the same comparative 2009 period. World refined usage ex-China increased by 10% over the same periods. According to preliminary ICSG data, the refined copper market balance for October 2010 switched to a small production surplus of 34,000 metric tons, following 7 months of consistent deficit. When making seasonal adjustments for world refined production and usage, October showed a deficit of 35,000 tons. The apparent refined copper balance for the first 10 months of 2010, including revisions to data previously presented, indicates a production deficit of around 400,000 tons (a seasonally adjusted deficit of 213,000 tons). This compares with a production surplus of 32,000 tons (a seasonally adjusted surplus of about 210,000 tons) in the same period of 2009. World mine production in the first 10 months of 2010 remained practically unchanged compared with that in the same period of 2009 (+0.5%). Concentrate production remained the same while solvent extraction-electrowinning (SX-EW) grew by 2.2%. Production in Chile, the biggest world producer, grew by a modest 0.7%, but was still 2.4% below that in the same period of 2007. Output from other major producers such as Peru, the United States, Australia and Indonesia, that combined represent around 25% of total world copper mine production, decreased by an aggregated 7%. The mine production capacity utilization rate in the first 10 months of 2010 was around 79.7%, reflecting the underperformance of mine production. During the first 10 months of 2010, world refined production increased by 4.6% (700,000 tons) compared with production in the same period of 2009, with 70% of the growth attributed to increased secondary production (from scrap). Primary refined production (from ore) increased by only 1.8%, while secondary production increased by 20.8%. The large relative increase in secondary refined copper production reflects in part the lower copper prices and consequent tight scrap market that existed in early 2009. World refined production growth has been mainly driven by China (13%), Japan (9.6%) and the EU (7%), that combined represent almost one half of world refined copper production. Production in two other major world refiners, Chile and the United States, which account for about one quarter of world production, decreased by a combined 2.5%. The refined production capacity utilization rate in the first 10 months of 2010 increased to 79.3% from 77.1% in the same period of 2009 and reflects increased scrap availability and the restoration of temporary cuts made in early 2009. The average LME cash price for December 2010 was a record-high US$ 9,147.26 per tons, up from the November 2010 average of US$ 8,469.89 per tons. The 2010 high and low copper prices were US$9,739.5 (31/Dec) and US$6,091.00 (8/Jun) per tons, respectively, and the average was US$7,539.32 per tons. As of the end of December 2010, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 568,182 tons, a decrease of 119,509 tons from stocks held at the end of December 2009.

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