[Pb] SMM Morning Review - 2009/11/9 Lead Market

WUHAN, Nov. 9 -- China's locally-produced copper scrap is expected to peak as early as 2014, a director at powerful industry body the China Nonferrous Metals Industry Association, said on Sunday.
&nbsp;&nbsp;&nbsp; &quot;Another five to six years, the collection of copper scrap domestically would enter into the peak period,&quot; Lu Jian, director of the information department of the association's recycling branch, told Reuters on the sidelines at the end of a two-day copper industry conference in Wuhan city in Hubei province.
&nbsp;&nbsp;&nbsp; He did not provide a scrap production estimate for that period but for this year Lu said the production of copper scrap in China would fall from last year's 600,000-700,000 tonnes following a sharp supply fall in the first quarter, when the global financial crisis cut demand.
&nbsp;&nbsp;&nbsp; &quot;The local collection of copper scrap basically stopped in the first quarter,&quot; Lu said.
&nbsp;&nbsp;&nbsp; He added that imports had also fallen mainly due to reduced overseas supply and tighter customs checks on scrap imports since May, increasing the cost of imports.
&nbsp;&nbsp;&nbsp; China produces a third of its copper scrap, heavily relying on imports, which fell 33 percent on the year to near 3 million tonnes in the first nine months of the year.
&nbsp;&nbsp;&nbsp; Scrap is used both by smelters as feed for the production of refined copper in China and by fabricators as feed for the production of semi-finished copper products.
&nbsp;&nbsp;&nbsp; A shortage of scrap boosted imports of refined copper to record highs in the first half by China, the driver for the over 100-percent price rise on the London Metal Exchange MCU3 this year.
&nbsp;&nbsp;&nbsp; A quarter of China's semi-finished copper products is made from copper scrap and a third of the country's refined copper production is made from scrap, Lu told the copper conference.
&nbsp;&nbsp;&nbsp; China produced 1.2 million tonnes of recycled copper in the first nine months of the year of which only a third came from locally collected scrap, he said.
&nbsp;&nbsp;&nbsp; That recycled copper output reflects a near 16 percent fall in monthly production on average this year. The output was 1.9 million tonnes in 2008.
&nbsp;&nbsp;&nbsp; (Source: Reuters)&nbsp;
&nbsp;