China's copper demand slowing down
Updated: 2008-03-11 17:12
Copper demand in China, the world's biggest user of the metal, is showing signs of a slowdown after prices soared and exports demand weakened, the country's second-largest producer said.
"Given rising copper prices, some processors are holding back on buying," Zhao Mingwang, general manager of the copper rods and wires division at Jiangxi Copper Co, said in an interview in the eastern province of Zhejiang today. "Demand is not very strong compared with the same period last year."
Copper for cash delivery has gained 27 percent this year, raising raw material costs for processors, builders and makers of appliances. Chinese exports in February rose at the slowest pace in almost six years as US demand slowed.
"There are concerns of a slowing Chinese economy after exports slowed in February," Zhao said while attending a conference. "Consumers will be reluctant to buy copper when the domestic price rises to above 65,000 yuan ($9,148.49) a ton because it's difficult for them to raise the prices of their products to cover the costs of the raw material."
Copper futures in Shanghai fell as much as 1.7 percent to 67,210 yuan a ton today, the third day of declines as domestic stockpiles increased. Inventories in Shanghai warehouses are at their highest in almost four months, according to an exchange report on March 7.
China's economy may grow at less than 10 percent in the first quarter, Lehman Brothers Holdings Inc said yesterday. The world's fastest-growing major economy expanded 11.2 percent in the fourth quarter of 2007 from a year earlier.
Half of China's copper demand comes from the power industry. A further 20 percent is used in light manufacturing, including appliances and electronic products, and 15 percent in transportation, according to research company Beijing Antaike Information Development Co.
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