Chinese copper surplus unlikely to affect import demand in ’96

Expansions at Chinese smelter-refinery operations will increase demand for imported copper in 1996, says a Brook Hunt report.

The mining and metal industry consulting firm predicts that China will have a small surplus (30-50 kilotonnes) of refined copper at the end of 1995, and that it will remain in surplus during 1996. Nevertheless, China will need to import increasing amounts of copper concentrates, blister and scrap, in order to keep its burgeoning smelting and refining industry operating at reasonable capacity.

Imports of copper concentrate are expected to rise by 53% to around 110 kt in 1995, and jump to some 200 kt in 1996.

Imports of refined copper should approach 140 kt in 1995, including 60 kt that were reimported following the Chinese State Reserve Board’s export of about 84 kt earlier in the year to Singapore. Total exports are expected to amount to 125 kt (including the SRB’s exports).

Refined copper consumption, which totalled 750 kt in 1994, is forecast to increase by 4% to 780 kt in 1995, with power and telecommunications cables leading the way among uses.

According to Brook Hunt, growth in refined consumption in 1996 will depend to a large extent on government economic policy and the release of credit to state-owned enterprises and rural peasants. The copper market in China is likely to be “quite quiet” for the rest of this year, but a bout of buying on world markets is expected in the first quarter of 1996. It is unlikely to be sustained because China should have surplus refined copper available for export next year.