Chinese Near Term Copper Demand May Rise -Aurubis-Shanghai Metals Market

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Chinese Near Term Copper Demand May Rise -Aurubis

Industry News 09:55:05AM Jul 23, 2012 Source:SMM

HAMBURG, July 20 (Reuters) - A revival of Chinese copper demand in the second half of 2012 is expected to help boost the global market when the outlook for European demand is less promising due to the euro zone crisis, Aurubis, Europe's biggest copper smelter, said.

London Metal Exchange copper prices have generally been rangebound between $7,500 and $7,700 a tonne in the last month "without indicating a clear direction", Aurubis said on Friday.

Three-month LME copper on the London Metal Exchange was at $7,655 a tonne by 1103 GMT on Friday after touching a two-week high of $7,813 on Thursday.

"There is talk on the copper market that the second half of 2012 could develop better than the first," Aurubis said in a report. "The primary reason for this assumption is the expectation of higher copper demand in China based first and foremost on the Chinese government's economic support measures, which could be reflected in better copper demand."

Two of the most important copper demand drivers in China are continued urbanisation and measures to improve the energy supply and energy efficiency, it said.

"Momentum for the recovery of demand is also expected from additional infrastructure projects, the automotive sector and the energy cable sector," it said.

Car sales in China have also risen, it said.

"In contrast, Europe looks less promising," it said.

"Southern Europe in particular is influenced by the euro crisis. While demand on the European spot market has been revived recently and the premiums have therefore climbed above the levels of the annual contracts, this is most likely due to delayed shipments and extremely low copper inventories of about 13,500 tonnes in the European LME warehouses."

Concentrate Market Quiet
The spot market for copper copper treatment and refining charges (TC/RCs) is quiet and traders are offering volumes of copper concentrates (for) for refining at short notice, it said.

TC/RCs are paid by miners to smelters to refine concentrate into metal and are a key part of the global copper industry's income.

Chinese smelters do not want to buy spot concentrate supplies for refining at under a TC/RC of $50 a tonne and 5.00 cents a lb, Aurubis said.

This was unchanged on previous months.

A TC/RC of $63.5/6.35 cents for longer term contracts was firmly established in the half-year contract negotiations with smelters, it said. This was the same as previous deals in December 2011.

"On the European copper scrap market, trade companies' willingness to sell has increased again due to the more stable copper prices," Aurubis said. "(Scrap) refining charges have recovered somewhat as a result."

"In addition to economic weakness, seasonal effects are currently having an impact on the European copper product markets, curbing demand accordingly."
 

Chinese Near Term Copper Demand May Rise -Aurubis

Industry News 09:55:05AM Jul 23, 2012 Source:SMM

HAMBURG, July 20 (Reuters) - A revival of Chinese copper demand in the second half of 2012 is expected to help boost the global market when the outlook for European demand is less promising due to the euro zone crisis, Aurubis, Europe's biggest copper smelter, said.

London Metal Exchange copper prices have generally been rangebound between $7,500 and $7,700 a tonne in the last month "without indicating a clear direction", Aurubis said on Friday.

Three-month LME copper on the London Metal Exchange was at $7,655 a tonne by 1103 GMT on Friday after touching a two-week high of $7,813 on Thursday.

"There is talk on the copper market that the second half of 2012 could develop better than the first," Aurubis said in a report. "The primary reason for this assumption is the expectation of higher copper demand in China based first and foremost on the Chinese government's economic support measures, which could be reflected in better copper demand."

Two of the most important copper demand drivers in China are continued urbanisation and measures to improve the energy supply and energy efficiency, it said.

"Momentum for the recovery of demand is also expected from additional infrastructure projects, the automotive sector and the energy cable sector," it said.

Car sales in China have also risen, it said.

"In contrast, Europe looks less promising," it said.

"Southern Europe in particular is influenced by the euro crisis. While demand on the European spot market has been revived recently and the premiums have therefore climbed above the levels of the annual contracts, this is most likely due to delayed shipments and extremely low copper inventories of about 13,500 tonnes in the European LME warehouses."

Concentrate Market Quiet
The spot market for copper copper treatment and refining charges (TC/RCs) is quiet and traders are offering volumes of copper concentrates (for) for refining at short notice, it said.

TC/RCs are paid by miners to smelters to refine concentrate into metal and are a key part of the global copper industry's income.

Chinese smelters do not want to buy spot concentrate supplies for refining at under a TC/RC of $50 a tonne and 5.00 cents a lb, Aurubis said.

This was unchanged on previous months.

A TC/RC of $63.5/6.35 cents for longer term contracts was firmly established in the half-year contract negotiations with smelters, it said. This was the same as previous deals in December 2011.

"On the European copper scrap market, trade companies' willingness to sell has increased again due to the more stable copper prices," Aurubis said. "(Scrap) refining charges have recovered somewhat as a result."

"In addition to economic weakness, seasonal effects are currently having an impact on the European copper product markets, curbing demand accordingly."