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PrintCopper production may outstrip demand in the 2013 calendar year by a margin equal to the shortfall in global production during 2012. This could lead to a fall in prices in the near-term. A slow down in the world economy could also lower demand for the metal, negatively impacting prices.
According to the International Copper Study Group, world demand for refined copper is expected to have exceeded production by about 0.42 million metric tonne in 2012. This was double the shortfall of 0.21 million tonne in 2011.
But while mine production is set to ramp up by 6.4% to 17.53 million tonnes and refined production by 6 per cent to 21.14 million tonne in 2012, refined usage is projected to rise only by 1.5% to 20.68 million tonne. This will result in a production surplus of 0.46 million tonne.
The growth in mine output in 2013 is expected to mainly stem from the resumption of production at existing mines rather than new projects. Most expansion and start-up projects are anticipated to come on stream only in 2014 or later.
One major factor contributing to the rise in 2013 production is enhanced capacity utilisation, which is likely to improve to an average of 81% during the year from 79% in 2011.
The bulk of the rise in output will come from secondary refined production, which is estimated to rise by 11% in 2013. Primary copper production, on the other hand, is expected to experience a lower growth rate of 6.5%
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