Global copper demand remains strong – Aurubis
Global copper demand remains firm despite fears of an economic slowdown and key consumer China is likely to raise imports again in November, Aurubis, Europe’s biggest copper producer, said on Tuesday.“The general view that demand is suffering due to economic concerns does not seem to fit with the inventory trend in the metal exchange warehouses,” Aurubis said in a report. “Copper production does not meet the requirements.”
London Metal Exchange inventories <0#LME-STOCKS> have decreased continuously by a total of around 70,000 tonnes since the end of the European summer in mid-September 2011 and are now just below 400,000 tonnes, Aurubis said.
“The additional quantities registered for delivery add up to about 27,000 tonnes,” it said. “The reduction will therefore continue. There are only about 74,000 tonnes in the SHFE (Shanghai Futures Exchange) warehouses. Copper stocks are thus disappearing all over the place.”
Chinese copper and copper product imports rose sharply in October despite fears of a slowdown, Aurubis said.
“A higher (Chinese import) number is also expected for November, as the lower copper prices which started in early September will start having an effect,” it said. “In addition to the price factor, possible production shortages at Chinese smelters play a role as well.”
“They are currently struggling with low treatment and refining charges for concentrates and have announced that they would prefer to lower production than to accept lower TC/RCs.”
Treatment and refining charges (TC/RCs) are the fees paid by mines and traders to smelters to refine copper concentrate into metal.
Spot TC/RCs are currently falling because strikes in mines in South America and Indonesia have lowered volumes of concentrates on international markets, increasing competition among smelters to gain sufficient supplies.
“With this combination of factors: good demand in core markets, low stocks and insufficient production, it is not surprising that a possible market shortage is anticipated for 2012,” Aurubis said.
(Reporting by Michael Hogan)
London Metal Exchange inventories <0#LME-STOCKS> have decreased continuously by a total of around 70,000 tonnes since the end of the European summer in mid-September 2011 and are now just below 400,000 tonnes, Aurubis said.
“The additional quantities registered for delivery add up to about 27,000 tonnes,” it said. “The reduction will therefore continue. There are only about 74,000 tonnes in the SHFE (Shanghai Futures Exchange) warehouses. Copper stocks are thus disappearing all over the place.”
Chinese copper and copper product imports rose sharply in October despite fears of a slowdown, Aurubis said.
“A higher (Chinese import) number is also expected for November, as the lower copper prices which started in early September will start having an effect,” it said. “In addition to the price factor, possible production shortages at Chinese smelters play a role as well.”
“They are currently struggling with low treatment and refining charges for concentrates and have announced that they would prefer to lower production than to accept lower TC/RCs.”
Treatment and refining charges (TC/RCs) are the fees paid by mines and traders to smelters to refine copper concentrate into metal.
Spot TC/RCs are currently falling because strikes in mines in South America and Indonesia have lowered volumes of concentrates on international markets, increasing competition among smelters to gain sufficient supplies.
“With this combination of factors: good demand in core markets, low stocks and insufficient production, it is not surprising that a possible market shortage is anticipated for 2012,” Aurubis said.
(Reporting by Michael Hogan)
Comments
Post a Comment