Mar.6 (Bloomberg) -- Copper demand in China may grow by 7 percent this year on strong economic growth, said Jiangxi Copper Co., as the country’s largest producer boosts output.
"China’s economic growth and investment will keep demand at a healthy level,” Li Yihuang, chairman of Jiangxi, said in an interview in Beijing today without elaborating. The company will lift production capacity to 1 million metric tons, up from 900,000 tons last year, he said. China is the largest buyer of the metal.
Copper touched a record $10,190 a ton last month after surging 30 percent in 2010 as the global economy recovered from the worst recession since World War II. Demand is proving to be resilient to the high prices and there hasn’t been any slowdown from China, Chile’s Mining and Energy Minister Laurence Golborne has said.
"As China continues to improve infrastructure and its power grid, it will support the demand for copper,” said Helen Lau, an analyst at UOB-Kay Hian Ltd. "The forecast is actually realistic and in line with our expectations.”
A decline in imports of refined material last year may result in higher shipments in 2011, according to Peter Hickson, UBS AG’s global basic materials and commodities strategist, Jan. 18. Imports of copper, including the refined metal, alloy and products, were little changed at 4.29 million tons in 2010, according to customs data.
Demand for copper is surging as the nation plans to build more homes, autos and appliances and upgrade power-grid networks. China’s government will target 8 percent economic growth this year and "decisively” curb increases in prices that could affect social stability,
Premier Wen Jiabao said in his annual state-of-the-nation report today.
Copper for three-month delivery closed 0.2 percent lower yesterday at $9,895 a ton on the London Metal Exchange.
"Copper sales on the spot market right now are rather weak, but for the year, copper will be in short supply,” said Jiangxi’s Li, who spoke ahead of the meeting of the National People’s Congress.
China’s economy expanded 10.3 percent in 2010, the fastest pace in three years, statistics bureau data show, compared with growth of 9.2 percent in 2009. After Japan reports gross domestic product for the fourth quarter on Feb. 14, comparative data may show China was the second-biggest economy last year. In nominal terms, gross domestic product is more than 100 times bigger than in 1978, when Communist Party leader Deng Xiaoping began rolling out free-market policies. While China outstripped Germany in 2007 and the U.K. and France in 2005, the economy remains less than half as big as that of the U.S.