China's refined copper demand is set to increase after the summer as fabricators increase purchases, likely boosting spot imports in coming months, end-users said on Tuesday. Spot imports of refined copper cathode from the world's top consumer of the metal may increase as domestic stocks have fallen about 40 percent since early May.
Total imports had slumped 14.22 percent to 1.78 million tonnes in the first seven months of the year. A rise in China's purchase may help support London Metal Exchange (LME) prices, which have risen less than one percent so far this year. Copper was at $7,387.5 per tonne in late Asian trade on Tuesday. It rose to a record $8,940 in July 2008.
"We are going to buy more than 10,000 tonnes of copper cathode in the spot market in September versus a few thousand tonnes in July and August," said a source at a producer of copper tubes used in air-conditioners, declining to be identified because he was not authorised to talk to the media.
The firm in the central province of Henan would also need to buy over 10,000 tonnes of spot metal per month in the fourth quarter because of extra orders, he said. That's in addition to term supplies booked late last year for shipments this year. "This year is the best year we have had," the source said, referring to orders. The firm's production of copper tubes this year would rise about 15 percent from a year ago thanks to strong demand from air-conditioner makers.
A manager at a copper rods producer in the southern province of Guangdong said some overseas clients were asking the firm to add shipments in September and October. The firm, which uses 14,000-15,000 tonnes of refined copper cathode a month, is likely to increase spot imports to meet fulfil extra orders, he said.
A production manager at a plant, which makes copper rods, plates and strips in the eastern province of Anhui, said the firm's orders were full for the rest of the year. Thin copper strips, used in electronics and computers, is registering the highest growth.
Strong demand has allowed the firm to raise prices for its products to cover increased copper costs, which have risen more than 15 percent since early June in China, said the manager. The firm uses about 70,000 tonnes of refined copper cathode a year.
Copper demand from the electricity cable sector has stayed firm, and has remained mostly unaffected by Beijing's move to tighten controls on the property sector. Use of power cables and copper products such as pipes and door locks is linked to the housing industry.
China's production of power cables rose 23.2 percent from a year ago to 14.1 million kilometres in the first seven months of the year, official data showed. Production of semi-finished copper products such as rods, plates, strips and tubes rose 14.5 percent from a year earlier to 6.1 million tonnes in the first seven months of the year.
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