LONDON (Reuters) – The International Copper Study Group (ICSG) has taken the red ink to both sides of this year’s copper market balance equation. Global consumption is now expected to register anaemic growth of just 0.3% this year, compared with the Group’s May assessment of 2.0%.
Supply is expected to fare even worse. The net outcome of these adjustments is a widening of the Group’s forecast supply deficit this year to 320,000 tonnes, from the 190,000 tonnes estimated in May. Next year’s expected balance has been flipped from a deficit of 250,000 tonnes to a surplus of 281,000 tonnes.
These headline findings should be interpreted cautiously given the statistical problems of calculating a supply-usage balance in a 25-million-tonne market.
“ICSG recognizes that global market balances can vary from those projected owing to numerous factors that could alter projections for both production and usage,” the Group warns, adding, “actual market balance outcomes have on recent occasions deviated from ICSG market balance forecasts.”
With that important caveat the ICSG’s twice-annual market update captures copper’s confusion this year, the price having been trapped between macroeconomic negativity and bullish micro supply-chain dynamics.
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