European copper demand may recover in 2010-Aurubis
Posted by Reuters News on 20 October 2009, 12:04 PM
communities.thomsonreuters.com
* European copper demand recovery possible in 2010
* Spot TC/RCs still at Sept level of $20/2 cents
HAMBURG, Oct 20 (Reuters) - European copper demand may start rising in 2010 if signs of an economic recovery are confirmed, Aurubis, Europe's biggest copper smelter, said on Tuesday.
Europe's economic performance is showing differing trends although Germany is performing above-average and the European Union has raised its 2010 economic forecasts, Aurubis said in a market report.
"It is rather unlikely that this will result in rising copper demand in the short-term, particularly since seasonal impacts take effect in the final quarter of the year and the buying activities of the processing industry are reduced," it said.
European industry traditionally runs down production in November and December before the Christmas and New Year holidays and for annual accounting.
"In the coming year, European copper demand, after elimination of the year-end effects, will lean more strongly towards the more positive economic trend, especially since inventories along the value addition chain are likely to have been reduced and will have to be repurchased even if the order intake remains moderate," Aurubis said.
Positive economic signals were being observed in Asia, especially China, said Aurubis, formerly Norddeutsche Affinerie.
Chinese September copper import figures "created some astounded faces" with a rise of 23 percent on the month and 87 percent on the year, it said.
"The puzzle is now to find the reason," it added. "Explanations vary from substitute purchases for still missing scrap quantities to additional purchases before the Chinese public holiday week in October."
"Since the buying interest in the last few days has continued despite the lack of arbitrage possibilities, this is also an indication of good physical end demand."
GLOBAL SPOT MARKET QUIET
The global spot market for copper treatment and refining charges (TC/RCs) remains quiet and levels are still around their September levels of about $20 a tonne and 2 cents a lb, Aurubis said.
This compared to $30/3 cents in early August and $50/5 cents reported in May.
TC/RCs are fees paid by mines and other concentrate owners to copper smelters to refine ore into metal and are a key part of the copper refiners' income.
"There have been hardly any spot TC/RC deals recently and so it is difficult to assess the level of the market," an Aurubis spokesman said.
Chinese smelters were seeking $60/6 cents for their 2010 long term TC/RCs, Aurubis said. This compared to $75/3 cents in 2009.
Chinese smelters said last week fees of $50/5 cents were being sought.
(Reporting by Michael Hogan; Editing by James Jukwey) |
