In European trade on Tuesday copper for delivery in December consolidated at a two-week high after strong year-to-date imports from top consumer China remained broadly in line.
Copper futures exchanged hands for $2.1025 per pound ($4,635 a tonne), less than a penny above yesterday's closing which was the highest since August 23. While other industrial metals and steelmaking raw materials have jumped in value this year, industry bellwether copper is trading flat year to date following a 26% decline in 2015.
China is responsible for more than 45% of copper demand and according to customs data released yesterday the country's imports of unwrought copper and copper products were 350,000 tonnes during August.
That's a 10,000 tonne decline from July which was mostly ascribed to seasonal factors but shipments were still broadly in line with summer 2015 . For the first eight months refined imports are up by more than 15% after hitting a record 570,000 tonnes in March.
While demand has held up well the copper market is set stay in surplus as new mines and expansions, particularly in Peru, ramp up to capacityCompared to August last year concentrate imports surged to close to 1.5 million tonnes. For the first eight months imports are up 34.6% at 10.86 million tonnes. Concentrate imports hit an all-time high in December.
MetalBulletin reports China's ten largest copper producers have agreed to cut production by 350,000 tonnes in 2016, although similar statements from the country's non-ferrous industry association concerning aluminum production downscaling have had little impact.
Any announcement about output reductions are welcome however since the copper market is set stay in surplus despite some cutbacks by top copper mining companies as new mines and expansions, particularly in Peru, ramp up to capacity and disruptions come in below historical levels.
While top producer Chile settled into a gentle decline, Peruvian copper production surged by more than 50% to just under 741,000 tonnes in the first half of the year.
Additional supply includes increased production from Freeport's Cerro Verde mine and the ramp-up of the Chinese-backed Las Bambas mine, both in Peru. Cerro Verde pumped out 260,000 tonnes during the first half of the year after Freeport completed a project to add 270,000 tonnes annual capacity at the mine.
Operator MMG's Las Bambas ramp-up is ahead of schedule and the new mine is expected to produce 250,000 - 300,000 tonnes this year and 400,000 in 2017. Hudbay's Constantia is also hitting its stride with 63,800 tonnes unearthed so far this year while Glencore's Antamina and Antapaccay mines both upped output substantially.
Add to Peru's success increased output at Vale's Salobo mine and the ramping up of Southern Copper Corp's Buenavista mine in Mexico. BHP Billiton last month also announced increased guidance at Escondida, the world's largest copper mine by some margin.
Goldman Sachs came out with a particularly bearish forecast last month and the investment bank now predicts double digit declines for the metal to a low of $1.80 per pound 12 months from now, citing the "wall of new supply from Chile, Peru and Zambia".