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Copper demand weakens on lackluster consumption
(China Daily)
Updated: 2010-04-01 11:01
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HONG KONG: Jiangxi Copper Co, China's biggest producer of the metal, said demand growth would slow this year as the government cuts spending on the power industry by a quarter.
Prices of the metal may drop in the second half as some countries may start to end their stimulus policies, Chairman Li Yihuang said on Wednesday at a press conference in Hong Kong.
Chinese copper demand is "weak" now because of lackluster consumption from the power industry, Tongling Nonferrous Metals Group Co said on March 5. Stockpiles in the country reached the highest level since at least 2003 this month.
"This year, China will cut power investment by 25.5 percent in the stimulus package," Li said. "As the power industry accounts for roughly 45 percent of total demand in China, I don't expect copper demand to grow substantially this year."
Jiangxi Copper fell 1.1 percent to HK$17.36 ($2.24) at 12:29 pm on Wednesday in Hong Kong trading.
The company on Tuesday posted a fourth-quarter net income of 623 million yuan ($91 million), compared with a loss of 1.4 billion yuan a year ago, according to figures derived from the full-year statement. The profit trailed the 840 million yuan mean estimate compiled by Bloomberg from 11 analysts.
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The smelter and copper miner needs about 464,000 tons of copper ore a year, and its own production accounts for about 35 percent of its needs.
Jiangxi Copper's projects in Peru and Afghanistan, which are expected to start operations in 2014, will increase ore supplies by 400,000 tons, Li said.
The company plans to boost refined copper production by 13 percent this year to 900,000 tons, from 800,000 tons last year, he said. It is still in talks to buy Yantai Penghui Copper Industry, Li said.
Yantai produces 120,000 tons of refined copper a year.
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