(MB) - Higher demand boosts Chinese domestic Cu prices 11/22/0 17:1 (New York)
November 22 (Metal Bulletin) - Rising domestic demand has
helped to boost copper prices within China but warehouse
premiums in Shanghai remain unchanged as high port stocks limit
activity in the East Asian physical market.
China produced 120,800 tonnes of copper and imported 76,000
tonnes in September, up 29.9% and 25% respectively on the same
month last year. Copper exports during the month reached 6,000
tonnes, a decrease of 55% over the same period in 1999. In the
period January-September 2000, China's total copper exports
reached 86,000 tonnes and imports 624,000 tonnes, up 25% and
47.9% respectively against the same period in 1999.
Chinese copper consumption in September was 160,000 tonnes, an
increase of 23% over the same period in 1999. Aggregate copper
consumption from January to September was around 1.25m tonnes,
31% up on the same period in 1999. In September, China's
domestic copper price surged due to a combination of the upward
trend in the international copper price and booming demand in
the domestic market. The average ex-works price in September
was 19,135 yuan per tonne, 5% higher than in June, while the
average spot price was around 19,340 yuan per tonne.
Industry experts predict that domestic copper prices will
continue to enjoy a surge in the rest of 2000. However, in the
wider regional market, physical trade remains quiet due to flat
demand. Shanghai in-warehouse premiums are still maintaining a
range of $60-68 per tonne over LME for spot metal. "Most of the
copper producers in China are trying to conclude long-term
contracts for next year," commented one industry player. Other
sources predicted that Chinese copper premiums are likely to
increase in 2001.
Meanwhile, adequate copper stocks at port are likely to keep
demand low until inventories are consumed by the end-users. "It
will take some time before we see demand picking up again,"
said a trader.
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