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Highlights

• Copper rallied to its highest level in 11 months on bets that a pick-up in global manufacturing activity will push up demand for industrial commodities. Chinese copper smelters agreed to reduce production at unprofitable facilities due to shortages of raw materials.

• Copper rose as global mined supply is tightening and Chinese demand is slowly recovering. China's industrial output soared by 7% annually throughout January and February, exceeding expectations. The global refined copper market showed a 20,000 metric tons surplus in December, compared with a 123,000 metric tons deficit in November, the International Copper Study Group (ICSG) said in its latest monthly bulletin. The rapid decline in spot copper concentrates treatment and refining charges (TC/RCs) exceeded market expectations, falling 38.87% month on month to a record low in February. Chinese top copper smelters agree to jointly undertake production cuts at loss-making plants to manage raw material shortage. No specific rates or volumes have been set for the cuts, each smelter will assess reductions.

• Copper prices hit their highest in seven months due to joint production cuts by Chinese smelters. Shortages have intensified competition for mined copper concentrates, causing a sharp fall in income for smelters. Kutch Copper Ltd (KCL) is set to become operational by the end of the current fiscal in Gujarat and is expected to double India's copper production by 63%. In 2023, global production of recycled-content secondary copper saw a significant increase of 9.58%, reaching over 4.55 million metric tons (mmt), representing 16.9% of global output.

• Primary copper production also experienced growth, with more than 22.3 million metric tons produced, marking a 5.3% increase compared to the previous year.

• Despite this, the mined output of copper grew at a slower rate, with preliminary data indicating only a 1% increase in 2023, primarily from concentrate production and solvent extraction-electrowinning (SX-EW). World apparent refined copper usage saw a notable growth of about 4% in 2023, fueled by increased demand from China's manufacturing and export sectors, although demand declined in the European Union, Japan, and the United States. Chinese apparent demand for copper (excluding changes in bonded/unreported stocks) grew by around 9%, with refined production increasing by 14%, although net refined copper imports declined by 5%. The global refined copper balance for 2023 faced a deficit ranging from 87,000 to 113,000 metric tons, depending on how Chinese inventories are measured, indicating tight market conditions.