Copper-Product Sales Better Than Expected, Poongsan's Choi Says

April 20 (Bloomberg) -- Poongsan Corp., the region's biggest maker of copper products, has raised its sales target as China drives increased demand, a further sign that the Asian nation's economic growth is spurring higher metal consumption.

The company may sell about 210,000 metric tons of copper and copper-alloy products this year compared with the previous forecast of 205,000 tons, Executive Vice President Choi Sang Young said in an interview. Poongsan is boosting capacity for sheets and strips, used in electronics, by 22 percent by 2012.

The upgraded forecast adds to evidence of stronger copper demand this year as China, the largest user, leads the global economy out of recession. China's demand may gain 14 percent this year, researcher CRU International Ltd. said this month, while Xstrata Plc forecast a 10 percent gain in copper usage.

"Chinese demand may continue to grow as the economy expands," said Choi, who has been with the Seoul, South Korea- based company for 31 years. "Poongsan is also benefiting from rising demand in Korea, whose car and IT markets are recovering faster than those in other nations," Choi said late yesterday.

Copper, which more than doubled in 2009 on stimulus spending, rose to more than $8,000 a ton on April 6 for the first time since the collapse of Lehman Brothers Holdings Inc. in 2008. The three-month contract on the London Metal Exchange gained 0.7 percent to $7,745 a ton at 9:41 a.m. Seoul time today.

'Pretty Good'

"Sales of sheets, strips and coin blanks are pretty good and that may go on," Choi said. "The current trend in the car and IT sectors may continue through the end of this year." Coin blanks are disc-shaped pieces of metal that are used for minting.

Shares of Poongsan have gained 54 percent in the past year, outperforming the 29 percent advance of the benchmark Kospi index. They climbed 0.6 percent to 24,850 won at 10:28 a.m. in Seoul today. The company, founded in 1968, was 32-percent owned by the largest shareholder Poongsan Holdings Corp. as of Dec. 31, according to a filing.

China's economy grew 11.9 percent in the first quarter, the fastest pace in almost three years. China's passenger car sales rose 63 percent in March as government stimulus policies helped to boost demand in the world's biggest vehicle market.

Hyundai Motor Co., South Korea's biggest carmaker, and Kia Motors Corp. led a ninth straight gain in monthly car sales in March, with Hyundai's sales up 36 percent. Samsung Electronics Co., Asia's biggest maker of chips, televisions and mobile phones, forecast on Jan. 29 that earnings at the Suwon, South Korea-based company will rise this year and it will boost capital spending.