Aurubis sees rising copper product demand

Reuters reported that strong demand is being experienced for copper products but surging copper prices are starting to impact on sales.

Aurubis said that sales of copper wire rod remain at a high level, the cable and wire industry is still ordering large quantities and the trend is rising. Copper shapes are also very much in demand, whereby the continuing high copper prices are slightly reducing the momentum in some market segments.

Three month copper CMCU3 on the London Metal Exchange was at USD 9,420 per tonne at 1232 GMT after hitting 5 week high of USD 9,944.75 per tonne. The overall demand in the copper market is positive although the impact of the Japan crisis is unclear.

The company said that nevertheless, the sideways movement of the copper price in recent weeks will continue as long as there are no significant new fundamental developments. It may only be possible to break out of the trading range of USD 9,300 per tonne to USD 9,800 per tonne when, for example, physical copper demand picks up substantially in the Q2 or if the copper stocks in the metal exchange warehouses decline again long term.

Meanwhile, China had shown strong copper import demand in March and Germany had been a surprise with its strong economic growth. Germany's copper intensive machine construction industry increased its production forecast from 10% to 14% for 2011 while the electrical engineering industry believes production will rise by 10% after previously only expecting 7%. This will be directly reflected in the physical sales of copper products.

Aurubis said that in Japan, one large copper smelter is located close to the troubled Fukushima nuclear power plant while other Japanese smelters are also believed to be having difficulty gaining the continuous energy supply necessary for copper production. If the situation calms down the first reconstruction measures and corresponding repercussions for copper demand can be expected in the second half of 2011.

It said that treatment and refining charges for copper concentrates have risen sharply in the last few weeks and are currently at USD 120 per tonne to USD 150 per tonne and 12 to 15 cents a lb for prompt shipments depending on the quality and destination rising from USD 80 per tonne and 8 cents a lb last month.