China Copper-Demand Growth Seen at Weakest Pace Since 2006

Industry News 04:47:33PM Feb 08, 2012 Source:SMM

Feb. 8 (Bloomberg) –Copper-demand growth in China, the largest user, may drop by half this year to the weakest since 2006 as the economy slows and subsidy programs end, according to the metals trader owned by the nation's biggest auto-parts maker.

Refined-metal consumption may expand 4 percent to 5 percent, said Shen Xiaoqiang, a researcher at Wanxiang Resources Co., a unit of closely-held Wanxiang Group. That compares with 8 percent to 10 percent in 2011, and more than 10 percent in 2010, said Shen, who's studied the market for more than a decade.

The metal used in wires has rallied 13 percent this year on speculation that the U.S. economy is recovering, and as stockpiles tracked by the London Metal Exchange fell. China, which accounts for 40 percent of global copper demand, ended a home-appliance subsidy program on Dec. 31 after two years. Appliance makers are the second-largest copper users in China.

"Demand in the past two years was aided greatly by subsidies for home appliances," Shen said by phone from Shanghai on Feb. 6. "While demand from government projects will continue, we remain a bit more pessimistic than consensus unless there are new measures to boost consumer spending."

State researcher Beijing Antaike Information Development Co. has said China's refined consumption may rise 6.4 percent to 7.85 million metric tons this year, compared with growth of 8.5 percent in 2011 and 11.5 percent in 2010. JPMorgan Chase & Co. estimates Chinese demand will gain 6 percent this year, while Standard Bank Group Ltd. forecasts growth of 6.6 percent.

Debt Crisis
Three-month copper on the London Metal Exchange, which tumbled 21 percent last year, gained 1.6 percent to $8,617 per ton at 3:09 p.m. in Singapore. Holdings tracked by the exchange have fallen 14 percent this year to 320,000 tons yesterday, the lowest level since September 2009.

China's economic growth may drop as much as 4 percentage points this year from a current projection of 8.25 percent should Europe's debt crisis worsen, the International Monetary Fund said on Feb. 6. China is headed for a hard landing as weaker demand overseas chokes off exports, according to Gary Shilling, president of A. Gary Shilling & Co. who correctly forecast the U.S. recession that began in December 2007.

Gross domestic product in China rose 8.9 percent in the fourth quarter from a year ago, dipping below 9 percent for the first time since mid-2009.

Copper demand from China's construction industry may be "relatively flat" as the government continues to increase the supply of so-called social housing even amid other property- market cooling measures, such as higher down-payments, said Shen.

Property Prices

China will start 7 million social homes this year, compared with 10 million in 2011, the People's Daily said Jan. 4. Home prices in China fell for a fifth month in January, according to SouFun Holdings Ltd., the biggest real-estate website owner.

While the domestic home-appliance market may get fresh subsidies this year, which may help copper demand, exports will definitely slow, Shen said. China reported the slowest export growth in two years in December, and overseas shipments face a "grim situation" this year, according to Zhang Xiaoqiang, a vice chairman at the National Development and Reform Commission.

The government will roll out measures to boost spending this year to meet the challenges posed by a global slowdown, Commerce Minister Chen Deming said on Jan. 5. Steps to stimulate consumption may include subsidies for purchases of vehicles and appliances, the China Daily said Jan. 4.

Chinese copper demand remains strong and markets for the metal are tight worldwide, Richard C. Adkerson, chief executive officer of Freeport-McMoRan Copper & Gold Inc. (FCX), the largest publicly traded producer, said on Jan. 19.









 

Key Words:  China copper demand 

China Copper-Demand Growth Seen at Weakest Pace Since 2006

Industry News 04:47:33PM Feb 08, 2012 Source:SMM

Feb. 8 (Bloomberg) –Copper-demand growth in China, the largest user, may drop by half this year to the weakest since 2006 as the economy slows and subsidy programs end, according to the metals trader owned by the nation's biggest auto-parts maker.

Refined-metal consumption may expand 4 percent to 5 percent, said Shen Xiaoqiang, a researcher at Wanxiang Resources Co., a unit of closely-held Wanxiang Group. That compares with 8 percent to 10 percent in 2011, and more than 10 percent in 2010, said Shen, who's studied the market for more than a decade.

The metal used in wires has rallied 13 percent this year on speculation that the U.S. economy is recovering, and as stockpiles tracked by the London Metal Exchange fell. China, which accounts for 40 percent of global copper demand, ended a home-appliance subsidy program on Dec. 31 after two years. Appliance makers are the second-largest copper users in China.

"Demand in the past two years was aided greatly by subsidies for home appliances," Shen said by phone from Shanghai on Feb. 6. "While demand from government projects will continue, we remain a bit more pessimistic than consensus unless there are new measures to boost consumer spending."

State researcher Beijing Antaike Information Development Co. has said China's refined consumption may rise 6.4 percent to 7.85 million metric tons this year, compared with growth of 8.5 percent in 2011 and 11.5 percent in 2010. JPMorgan Chase & Co. estimates Chinese demand will gain 6 percent this year, while Standard Bank Group Ltd. forecasts growth of 6.6 percent.

Debt Crisis
Three-month copper on the London Metal Exchange, which tumbled 21 percent last year, gained 1.6 percent to $8,617 per ton at 3:09 p.m. in Singapore. Holdings tracked by the exchange have fallen 14 percent this year to 320,000 tons yesterday, the lowest level since September 2009.

China's economic growth may drop as much as 4 percentage points this year from a current projection of 8.25 percent should Europe's debt crisis worsen, the International Monetary Fund said on Feb. 6. China is headed for a hard landing as weaker demand overseas chokes off exports, according to Gary Shilling, president of A. Gary Shilling & Co. who correctly forecast the U.S. recession that began in December 2007.

Gross domestic product in China rose 8.9 percent in the fourth quarter from a year ago, dipping below 9 percent for the first time since mid-2009.

Copper demand from China's construction industry may be "relatively flat" as the government continues to increase the supply of so-called social housing even amid other property- market cooling measures, such as higher down-payments, said Shen.

Property Prices

China will start 7 million social homes this year, compared with 10 million in 2011, the People's Daily said Jan. 4. Home prices in China fell for a fifth month in January, according to SouFun Holdings Ltd., the biggest real-estate website owner.

While the domestic home-appliance market may get fresh subsidies this year, which may help copper demand, exports will definitely slow, Shen said. China reported the slowest export growth in two years in December, and overseas shipments face a "grim situation" this year, according to Zhang Xiaoqiang, a vice chairman at the National Development and Reform Commission.

The government will roll out measures to boost spending this year to meet the challenges posed by a global slowdown, Commerce Minister Chen Deming said on Jan. 5. Steps to stimulate consumption may include subsidies for purchases of vehicles and appliances, the China Daily said Jan. 4.

Chinese copper demand remains strong and markets for the metal are tight worldwide, Richard C. Adkerson, chief executive officer of Freeport-McMoRan Copper & Gold Inc. (FCX), the largest publicly traded producer, said on Jan. 19.









 

Key Words:  China copper demand