SHANGHAI, Jun. 27 (SMM) – The LME Week Asia 2013 was launched in Hong Kong June 25, with “Exploring New Horizons” as this year’s theme. The event brings together leading market participants from the metals community to discuss the development, trends and opportunities within Asia’s dynamic markets and, in particular, that of the Mainland China.
China to See Growing Demand for Nonferrous Metals
Zhao Yong, Deputy General Manager of Minmetals, foresees continuing growth of China’s nonferrous metals demand primarily driven by the urbanization progress. China’s urbanization will give a boost to investment in infrastructure and property sector, pushing up demand for raw materials, including nonferrous metals. However, the demand growth will likely slow given the slowing structural adjustment in China.
[Reports on LME Week Asia]
LME Approves Kaohsiung as Delivery Point
LME has approved Kaohsiung in Taiwan as a delivery point and Kaohsiung will start LME metals delivery business three months after approval of the first warehouse. Rob Hall from LME said LME is obliged to establish effective delivery network in the region. Asia posted the fastest industry growth across the world, and the appointment of Kaohsiung as a LME delivery region will allow LME to better meet metals demand in Asia.
Emphasis on Chinese Market
LME attached great importance to Chinese mainland market this year, with the event laying stress on cooperation between China mainland and Hong Kong, influence of mainland market development on future commodity markets. The participation of the Bank of China International is another bright spot at the event.
China Plans to Shut Down Backward Copper Smelting Capacity, TC to Rise
Li Baomin, President of China’s largest copper producer Jiangxi Copper, said China plans to eliminate backward copper smelting capacity, which may help buoy TC in international markets.
High Copper Price Adverse to China Smelters
Li Baomin also pointed out that 70% of China’s demand for copper ore should be met by imported resources, so China’s copper smelters gained little from high copper prices during the past decade as most profits went to large copper mining companies.
China NPI Industry Faces Further Consolidation
Yang Zhiqiang, President of Jinchuan Group, said at the LME Week Asia that China’s NPI industry may see further consolidation due to the Indonesia’s ban on nickel ore exports and falling nickel prices.
Copper Financing Continues
He Jinbi, President of Maike Metals Group stated that despite tighter regulation, copper financing in China continues.
Scrap Copper Shortage May Excert Greater Influence
According to Chairman of Tongling Nonferrous Metals Wei Jianghong, the decline in scrap copper output is driving downstream buyers to refined copper market, which will tighten refined copper supply.
Copper Demand to Continue Growth in 15-20 Years
Managing Director of Deutsche Bank Ma Jun said steel demand will continue rising in the next five years, with copper demand expected to keep growing for another 15 or 20 years.
Aluminum Demand from China Transportation Sector to Rise to 5.7 Mln Mt by 2015
According to the China Nonferrous Industry Association, annual aluminum consumption from China’s automobile and motorcycle sectors may reach 4 million mt and 1.4 million mt by 2015. Aluminum demand from container and railway sectors is expected to increase to 120,000 mt and 80,000 mt.
China Refined Copper Consumption to Grow 5% by 2014
According to domestic research institutions, China’s refined copper consumption is expected to grow 5% to 8.5 million mt in 2014, but copper output growth outstrip 5%.
China Over-concerned about Overcapacity
Daniel Smith from the Standard Chartered expressed optimism to commodity market, and China is too concerned about overcapacity. But the bank expected no rebound in commodity markets in the near term.
China Should Consider Holding Stake for Overseas Resource Development
Chen Donghua, General Manager from the China International Futures, as development of overseas resources will be affected by numerous factors, including policies, economy, resource, and culture, which pose high risks, Chinese investors should consider holding part of stakes for investment in overseas resources.