CNMIA official sees excessive investment in copper exploration
Source: Hoovers
High copper prices are fueling increased industry investment in exploration, which could eventually hurt producers, smelters and ultimately consumers, a representative of China's Non-Ferrous Metals Industry Association said Wednesday.
"There's a trend to blind expansion and we fear that would result in over-capacity," Shang Fushan, deputy secretary-general of the industry group, said during a presentation at the sixth annual CRU World Copper Conference.
According to the official, over-development of copper mines will result in oversupply, forcing red metal prices to take a nosedive.
"Smelters won't be the only losers; mine producers will also lose," he told conference participants.
In addition to over-supply, the copper industry also faces the risk of substition, a woe common to most metal miners.
"Many copper application sectors have begun looking for substitutes ... this won't favor the industry," he said.
Industries that intensively use copper, such as cable, radiator, pipe, and air conditioning manufacturers, have already begun to look for substitute, and that substitution may be permanent, he said.
In 2006, China consumed about 3.58 million metric tons of refined copper, a slight drop from the 3.68 million tons it consumed in 2005, according to Fushan.
Based on preliminary statistics, last year China produced 755,000 tons of copper in concentrates, 3.0 million tons of refined copper, up 4.1% and 14.0%, respectively, from 2005, he said. |
