SHANGHAI, Oct. 24 (SMM) –Kong Qingying, General Manager of Research Department of China International Capital Corporation (CICC) expressed optimism about China's copper demand when accepting a journalist's interview.
China Customs data showed China's imports of unwrought copper and copper semis were 380,500 mt in September, up 11.8% MoM and the highest in eight months, indicating China's copper demand is still robust. Kong said China's copper demand will experience a growth of between 5-6% in 4Q 2011, if no special event occurs. The current uncertain factor is power restrictions, which only have a limited impact on copper demand.
Based on an earlier notice issued by the National Development and Reform Commission (NDRC), as water volumes from major domestic watersheds were low, water reserves in a fewer hydropower plants, especially in South China, were down 4-8% from the same period last year. According to the State Power Supervision and Management Committee, China will face big power shortages in the winter of 2011 and the spring of 2012, with the shortages expected to reach 26 million KW, and South China and Central China will be the most severely affected given shortages of coal and water. Some market insiders thus expect power for industrial use will be restricted again in the winter of this year, so as to insure residential use at first.
With regard to China's copper inventory consumption, Kong said the consumption of existing copper inventories indeed pushed down copper demand, with expectations at around 500,000 mt.