SHANGHAI, Sept. 26 (SMM) –
China's apparent consumption of refined copper during August was 753 kt, up from July's 668 kt. Increases in refined copper output and imports during August helped apparent consumption of refined copper increase by 85 kt. Coupled with a drop in August inventories, real consumption in August should also increase, but would seem to contradict the seasonal low demand from downstream producers. In fact, operating rates during August at downstream producers were reported to slightly stabilize from July's low levels, so SMM believes increases in demand largely came from stockpiling at low prices. Since copper prices fell further during September and dampened market confidence, downstream producers have chosen to stand on the sidelines. Hence, SMM believes China's apparent consumption of refined copper will probably fall in September.
China's apparent consumption of copper semis in August was 1.03 million mt, well above July's 978 kt. The increases in apparent consumption came mainly from increases in copper semis output, which also proved China's copper demand was up in August. However, increases in copper semis consumption failed to raise copper prices. SMM believes that although macro-economic factors are dominating copper price trends, higher copper consumption is also giving support to copper prices, helping copper prices avoid constant declines. In addition, consumption in September was steady at August levels, but panic market sentiment will likely negatively impact downstream producers, so SMM believes China's apparent consumption of copper semis will fall slightly in September.