Reuters reported that China's top copper producer Jiangxi Copper expects domestic copper prices to rise this year mainly due to a supply squeeze.
Mr Li Yihuang chairman of Jiangxi said that "Domestic supply of copper will be a bit tight this year and prices are expected to rise, especially in the H1. Copper prices have risen rapidly over the last 2 years in part because of growing consumption in China, the world's second biggest economy which needs the metal for its buoyant construction industry.
Three month copper on the London Metal Exchange CMCU3 has now reached around USD 9,900 per tonne while Shanghai's most active copper contract SCFcv1 closed at CNY 74,720 per tonne.
Mr Li said that he expected domestic consumption to rise by around 7% this year. He had not heard of any plans to sell copper from government reserves. The company was working with officials in Afghanistan on finding a way to move forward with the Aynak copper project southwest of Kabul which has been delayed due to the discovery of ancient Buddhist relics at the mine some more than 15 centuries old.
He said that the project is 75% owned by Metallurgical Corporation of China Limited and 25% owned by Jiangxi Copper. There is a special team doing research on how to proceed with the project and the results are likely to come out in March.