Column: Copper’s anticipated supply surplus is proving elusive – by Andy Home (Reuters – May 10, 2023)

LONDON, May 10 (Reuters) – The global copper market is facing another year of supply deficit, according to the International Copper Study Group (ICSG). The Group’s April forecast is for a supply shortfall of 114,000 tonnes this year after a 431,000-tonne deficit in 2022.

When the ICSG statistical committee last met in October, it expected a shift to surplus this year to the tune of 155,000 tonnes. That market turnaround is now only seen materialising next year. The calculated difference between small deficit and small surplus is a marginal one in the context of a 26-million-tonne global market but the change of view captures two key strands in the current copper narrative.

Usage, particularly in China, appears to be growing faster than previously forecast, while mine supply is yet again failing to live up to expectations. The ICSG’s expectations for another year of copper shortfall are in part due to “better expectations for Chinese usage as compared to the Group’s previous forecast,” it said in its April 28 update.

China’s “apparent usage” of refined copper is now forecast to grow by 1.2% this year and by 2.6% in 2024. The calculation could easily be thrown off, since it is based on changes in visible inventory combined with China’s net imports of refined metal.

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