Energy
China's power plan may mean copper imports: Aurubis
(Agencies)
Updated: 2011-01-20 15:12
 |
Large Medium Small |
HAMBURG - China's plan to modernize its electricity transmission network may stimulate more copper imports and raise Chinese copper prices, Aurubis, Europe's biggest copper smelter, said on Wednesday.
China announced a series of targets for its power sector on Jan 6 including modernization of the rural power grid. Power cables have a high copper content.
The grid modernization "will result in additional copper demand," Aurubis said. "Since a significant portion of Chinese copper consumption must have resulted from the depletion of local stocks in light of consistent imports of wrought copper and copper products in 2010, this might cause imports to rise in 2011," Aurubis said.
"The rebuilding of stocks outside of the metal exchange could result in the copper prices in China increasing above the level of the LME (London Metal Exchange) again, and thus reopen the arbitrage window -- a situation that benefits copper imports."
| ||||
London copper prices hit a record high on Wednesday while Shanghai hit its highest in almost four years, lifted by a fall in the dollar and positive US earnings expectations.
The current high copper price "reflects not least the expectation of a significant market imbalance in which demand will considerably exceed supply," Aurubis said."In Europe and North America business is slowly returning to normal following the close of the year, but up-to-the-minute news releases and institutional investors still primarily control events."
Good supply on the European markets for copper scrap continues, it said.
"Copper products are still in high demand, which was also evident in the 2011 annual (contract) negotiations, it said.
What is traditionally the most demand-intensive time of the year for products will begin in February, it noted.
| 分享按鈕 |