SHANGHAI, Jun. 29 (SMM) – Copper prices will resume a downward track due to output growth expected in the second half of 2015 plus a lack of improvement in demand, SMM foresees.
SMM research finds that only two of large copper smelters in China, representing some 300,000 tpy in capacity, are still in maintenance cycle or planning for maintenance operations. These two smelters are scheduled to reopen before late August.
Moreover, the large number of copper concentrate imports in H1 will make sure that copper smelters achieve their production plans. China Customs reported a 13.97% year-on-year rise in copper concentrate import January-May.
“China’s refined copper output will register a sharp rise in H2 and those capacities newly coming online may allow the full-year production to hit 8.8 million tonnes,” SMM predicts.
On the demand side, SMM remains not optimistic about China’s copper consumption growth in the latter half of the year.
“Disappointing data for the second quarter indicate that China’s stimulus measures have failed to deliver significant effects, and fixed asset investment, housing investment and power investment were still slow, and this bodes ill for copper demand,” SMM analyst says.
The year-on-year decline in utilization rate at wire & cable producers – claiming almost 50% of China’s copper consumption – also reflected lackluster copper demand.
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