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Copper demand to rise 10 percent

(CRIENGLISH.com )
Updated: 2007-04-03 14:51

Charlie Sartain, chief executive for copper at Xstrata Plc, the world's fifth-largest miner, said the growth in China's demand for all commodities "is just phenomenal," and prices may rise for the next few years.

Demand for copper in the Asian country may increase 8-10% this year compared with 2006, Sartain said in an interview in Manila. "We do see, across all commodities, phenomenal growth," he said.

China, the world's fastest growing major economy, has spurred a five-year rally in commodity prices as manufacturers use more steel, nickel and tin.

The price of copper on the London Metal Exchange rose to a record $8,800 a tonne last May. China is the world's largest user of the metal. The "Chinese economy will keep growing strongly and so will commodities demand, including copper," Chen Yue, Shenzhen- based analyst at Guotai Junan Securities Co, said on Monday. "We are bullish on copper prices for the next few years."

Demand for copper, used in pipes and wires, was also rising in Europe, especially Germany, and the Middle East, said Sartain. "The other part of the equation is supply, and over the last two to three years, we've seen the increase in supply has been significantly lower than the market was expecting," he said. Three-month copper futures in London, which have advanced 23% over the past 12 months, traded at $6,890 a tonne.

"China's industrial growth is just spectacular," said Sartain. Output in the country rose 18.5 % in January and February, the National Bureau of Statistics said March 15, beating the 15% median estimate of 20 economists surveyed by Bloomberg News. Output gained 14.7% in December.