Global copper deficit narrows slightly in 2021, ICSG study shows

The International Copper Study Group (ICSG) has found that the deficit in the global refined copper market reduced faintly to 475,000 tonnes last year, compared to a 484,000 tonnes shortfall in 2020.

In a new report, the ICSG said mine production grew by around 2.3% in 2021 but noted this compared to a low base in 2020 due to the impact of rolling global lockdowns on the copper mining industry. Average annual copper supply growth over 2019-2020 was only 0.3%.

Despite the return to meaningful production growth globally last year, the world’s largest supplier – Chile – saw a 1.9% decrease, with concentrate production falling by 1.3% and SX-EW output declining by 3.6%, mainly at the Escondida mine. Chile’s 2021 production was 2.8% below that of 2019.

Fortunately, Chile’s neighbour Peru – the world’s second largest copper producer – was able to pick up the slack with a 7% increase in output last year. However, production in 2021 remained 6.5% below that of 2019.

Indonesia’s output saw a sharp 49% increase thanks to the continued ramp up of underground production at the Grasberg mine. Substantial increases were also seen in the Democratic Republic of Congo (+12%), Panama (+61%) and China (+10%) due to additional output from new and expanded operations or improved operational levels.

The ICSG also highlighted a 28% increase in Russian output over the past five years, primarily due to the start up of new mines. Russia’s copper production reached about 875,000 tonnes of copper in 2021, accounting for around 4% of global copper mine production.

Earlier this week, the London Metal Exchange said it had no immediate plans to ban Russian metals (including copper) from trading on its platform, in light of the ongoing invasion of Ukraine.

Copper prices touched a record high of $10,845 a tonne last week on the back of supply fears, in an already tight global market.