Copper consumption likely to receive support from power industry in Q4

SHANGHAI, Aug 29 (SMM) – Potential strength is expected in copper demand from the power industry in the fourth quarter as China’s State Grid will accelerate its investment in order to meet its annual targets. 

By the end of July, realised investment by the State Grid stood at 202.1 billion yuan, only some 40% of its targets of 512.6 billion yuan for 2019. This marked the slowest pace in six years.

Data from China Electricity Council showed that the realised investment in power grid projects in the first seven months of this year shrank 13.9% from the same period last year. But the declines narrowed from a year-over-year drop of 19.3% in January-June, still indicating support to copper consumption. 

The power industry accounts for around 46% of total copper consumption in China. 

Copper consumption will also get a boost from the construction industry as China stepped up the efforts to renovate shantytown this year. 

This was evidenced by the standout performance of the downstream wire and cable sector, whose operating rates climbed 1.78 percentage points from June to stand at 91.48% in July.