Aurubis CEO sees strong 2012 Chinese copper demand

 

 

The copper market was concerned about the cut in China's forecast economic growth to 7.5 percent in 2012 as the country accounts for 40 percent of global copper demand, Peter Willbrandt said on Thursday at the Metal Bulletin international copper conference in Hamburg.

 

 

Despite the lower-than-expected economic growth, China's own copper producers were still expecting a growth in Chinese copper demand this year, Willbrandt said.

 

 

"I am confident as well," he said.

 

 

Chinese Premier Wen Jiabao said on Wednesday China must embrace slower growth and bolder political reform to keep its economy from faltering, which helped push copper prices down from a one-week high.

 

 

Chinese growth of around 7 percent would still generate additional demand for about 0.5 million tonnes of copper, which is equivalent to the output of two large mines, the conference heard from Javier Targhetta, president of Spanish smelter Atlantic Copper, a unit of Freeport-McMoRan Copper & Gold .

 

 

John Peter Leesi, CEO of UK-headquartered copper products group Luvata, said he was also confident of continued growth from China.

 

 

"You might see some sort of blip in demand from China but the mega-trend (for growth) remains intact," he said. "I am not concerned about overall Chinese copper demand."

 

 

Higher copper prices were meanwhile causing more market volatility, Willbrandt said.

 

 

Copper has risen around 11 percent so far this year, after a 21 percent fall in 2011, on a brightening economic outlook in the United States and hopes that easy monetary policies around the world would buoy asset prices.

 

 

Benchmark copper on the London Metal Exchange (LME) was up 0.71 percent at $8,520 a tonne at 1450 GMT, after closing at $8,460 on Wednesday.

 

 

"Market participants are trying to minimise stocks which causes more volatility as there is more short term buying," Willbrandt said. "Everyone is trying to minimise their working capital."

 

 

Riccardo Garre, co-director of Italian copper products producer KME, said product innovation among rival materials rather than high copper prices was often the greatest danger as consumers were considering substituting copper.

 

 

Some European copper product makers were cutting research and development investment to save costs, Garre said.

 

 

But rival producers of products from aluminium, carbon steels and plastics were investing heavily in research which could help them make inroads in copper markets, Garre added.