China's copper usage falls this year, demand may rise in '07
China, the world’s biggest copper consumer, will use more of the metal this year and in 2007 to feed its growing economy, although demand will slow, Beijing Antaike Information Development analyst Wang Jun said.
By Agencies |
HONG KONG: China, the world’s biggest copper consumer, will use more of the metal this year and in 2007 to feed its growing economy, although demand will slow, Beijing Antaike Information Development analyst Wang Jun said.
China’s consumption of copper is expected to fall 7% to 3.4 million tonnes in 2006, the National Development and Reform Commission, China’s top planning agency, said on Monday. Wang said actual demand this year would be greater than in 2005 as the figures did not appear to include usage from stockpiles.
The world’s fastest-growing economy has been drawing on domestic stocks of the metal this year to use for cable and electric wires in houses and cars, while imports have fallen due to high world prices.
London Metal Exchange copper for delivery in three months closed at a record $8,800 a tonne on May 11. “We expect China’s copper consumption to have grown this year, and grow next year, albeit at a slower rate,” Wang said, without giving precise forecasts.
The average price for copper this year will be about 75% higher than the 2005 price, the National Development and Reform Commission said. The commission’s forecast for reduced usage of copper may refer to “apparent consumption” only, which is production plus imports minus exports, without being adjusted for changes in inventories, analysts including Antaike’s Wang said.
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China’s actual copper consumption may grow by 3 to 5% this year, and by as much as 5% next year, Shen Haihua, vice-president at Maike Futures Co, said. Chinese copper producers and consumers have de-stocked 75,000 tonnes of the metal in the first 11 months of this year, while the State Reserve Bureau has disposed of 200,000 tonnes, Ang Xiaodan, an analyst at Minmetals StarFutures Co, said. Copper for delivery in three months on the LME traded $50 up at $6,375 a ton at 4-10 pm Shanghai time. The contract settled at an eight-month low on December 22, the last trading day before the Christmas and Boxing holidays, on concern that slower economy growth in the US and China may reduce demand for the industry metal.
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