SEOUL, Nov. 26 -- Metals demand in South Korea, Asia's third-biggest base metals buyer, may weaken next year as the global economic recovery slows, a local industry group said.
Domestic consumption of six industrial metals, including copper, aluminum and zinc, will fall about 3 percent next year from an estimated 2.72 million metric tons this year, Kim Soo Bong, director at the Korea Nonferrous Metal Association, said in an interview in Seoul yesterday. South Korea used about 2.55 million tons in 2008, he said.
Copper, lead and palladium have doubled this year, buoyed largely by China's 4 trillion yuan ($586 billion) stimulus spending. Commodities may weaken in the first six months of 2010 as the dollar strengthens and the pace of the global recovery trails some expectations, Standard Chartered Plc said Nov. 23.
"There is still some concern that the world economy may slip into a double-dip," Kim said. "The construction industry, in particular, may take another year for a recovery."
Copper, used in electrical cabling and construction, is trading near a 14-month high even as stockpiles rise. It gained 1.7 percent to $6,985 a ton on the London Metal Exchange yesterday. Aluminum increased 1.1 percent to $2,047 a ton.
"There is a question mark whether China will continue soaking up metals for stockpiling next year," said Kim, whose organization includes Korea Zinc Co., the world's second-biggest zinc refiner, and LS-Nikko Copper Inc., operator of the world's third-largest copper refinery and smelter.
Refined copper imports by China, the world's biggest metals consumer, will slump in 2010 as high stockpiles damp demand, Che Hongyun, an analyst at China Galaxy Futures Co. and Yang Changhua, an analyst at Beijing Antaike Information Development Co., said on Nov. 9.
Prices are "completely disconnected" from supply and demand and may fall 25 percent, Commerzbank AG analyst Eugen Weinberg wrote in a research note this week.
Global copper supply outpaced demand by 151,000 tons in August from 4,000 tons in July, the International Copper Study Group said in a Nov. 23 report.