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Copper futures surge to daily limit

By Jin Rong (China Daily)
Updated: 2006-08-08 09:22

Analysts say they expect the copper price to continue its upswing in the short term.

"The copper price is expected to maintain an upward curve in the short term as the high price on the London Metal Exchange is unlikely to see a sharp fall and consumption in the country is picking up," said Ma.

China, the world's largest copper consumer, consumed about 5.3 million tons of copper in 2005, according to Beijing Antaike Information Development Co Ltd, a Beijing-based metal industry consultancy.

The country is estimated to have consumed about 3.65 million tons of refined copper.

The number is forecast to hit 3.9 million this year, according to the consultancy.

China's copper consumption, which grew by an average 11 per cent annually from 1990 to 2005, is largely in line with the country's booming economy, especially the power and auto industry.

The sweeping nationwide grid upgrade and the dynamic auto industry, experts said, are two major copper guzzlers in China as the metal is widely used in pipes and wires.

The power and related industries, experts estimate, account for 55 per cent of total copper consumption in China.

The country poured about 170 billion yuan (US$2.1 billion) into developing or upgrading its nationwide grid, a figure that is expected to hit 200 billion yuan (US$2.5 billion) this year.

While the auto industry has also witnessed breakneck growth over the past few years, auto production and sales grew by 36.6 per cent and 36 per cent year-on-year in the first quarter of this year respectively.

Copper for cash delivery climbed to 70,300 yuan (US$8,787) a ton, or 3.1 per cent, yesterday in Changjiang, the biggest spot market in Shanghai.