Peak Production Copper Dropping

If someone told you that production is increasing, yet inventory is going lower.

What would you think the reason is?

Could it be massive population booms in China and India meant infrastructure and construction required base metal is driving demand up?

And now that we know peak production is going down for most majors (Xstrata Copper) in Chile and worldwide... what would that mean for juniors with stake in Copper-rich areas like Chile, Bolivia, and Argentina??

World mine copper output up 26 pct in 1998-2007 -ICSG

Article layout: raw
LONDON, July 28 (Reuters) - World copper mine production rose by 26 percent to 15.4 million tonnes in the 10 years to 2007, the Lisbon-based International Copper Study Group (ICSG) said in a release on Monday.

World mine capacity rose by more than 37 percent to 17.887 million tonnes over the same period.

"Mine capacity utilization rate averaged 91 percent during the period, the rate fell sharply during the second half of the period and averaged only 87 percent in 2006-2007," ICSG said.

"(That was) as a result of lower head grades, labour unrest, equipment and utility shortages, and operational failures."

Mine production grew by an average of 1.7 percent per year in 2006 and 2007 compared with an average growth of 3 percent per year during the preceding 8 years.

World refined production rose by 28.5 percent to 18.1 million tonnes in the 10 years to 2007.

Within the total, primary refined production rose by 28 percent to 15.308 million tonnes in the 10 years to 2007 and secondary refined production increased 31 percent to 2.775 million tonnes.

"During this 10-year period, China's annual refined production nearly tripled, increasing by 2.4 million tonnes to around 3.5 million tonnes," ICSG said.

"In Chile, by 2003 production had risen to about 2.9 million tonnes, an increase of 600,000 tonnes, before stabilizing at about that level."

ICSG said significant increases also occurred in Australia, India, Japan, South Korea, Russian Federation and Zambia. Together they added more than 1.7 million tonnes to world refined production.

The United States, which had been the leading world producer in 1998 slipped to fourth position as a world producer of refined copper.

"Annual refined copper usage increased by 34 percent during the 10-year period from 13.5 million tonnes to 18.1 million tonnes -- annual growth rate of 3.4 percent," ICSG said.

"Growth has been driven by China, where usage over the 10-year period increased by around 3.5 million tonnes -- a rise of 250 percent. The annual growth rate over the period excluding China was only 1 percent."

Total world copper stocks rose from 1998 to a peak at 2.05 million tonnes in 2002. Stocks began to decline in 2003, and by the end of 2007 had fallen by around 1 million tonnes.

(Reporting by Pratima Desai; editing by Michael Roddy)

Keywords: METALS COPPER/ICSG tf.TFN-Europe_newsdesk@thomsonreuters.com

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