Copper mine production rose 1.5%
In the last part of this series, we explored the recent trend in copper consumption. In this part of the series, we’ll analyze how copper production is shaping up this year. The data were released by the ICSG (International Copper Study Group) on June 22.
In the first three months of the current year, global copper mine production rose 1.5% YoY (year-over-year). Please note that the mined copper has to go through several processes before it’s made into refined copper. Latin America (ILF) holds the sway when it comes to copper production at the mine level. BHP Billiton (BHP), Southern Copper (SCCO), and Teck Resources (TCK) have copper mining operations in Latin America. Currently, BHP forms 0.48% of the Vanguard FTSE All-World ex-US ETF (VEU).
Refined copper production
The previous chart shows the YoY changes in refined copper production. Global refined copper production rose 5% until March. Primary copper production rose 3%, while secondary copper production rose 12% over this period. Please note that copper produced from scrap is referred as “secondary copper.”
Copper production fell in the US
Refined copper production in China rose 9% YoY until March. Apparently, China was the biggest contributor to the surge in refined copper production. Refined copper production in Chile and the US fell 4% and 3.5%, respectively.
China’s copper demand is languishing. It’s facing the worst economic slowdown in the last 25 years. In contrast, refined copper production has continued to rise. China has installed a lot of copper refining capacity in the last few years in anticipation of future demand growth.
Rising production in China is adding to the global copper surplus. In the next part, we’ll discuss why investors should keep a close eye on the copper surplus.