Aurelio Resource Corp (fka AULO)

[MUSHROOMKING]

China Copper Imports
Estimates Suggest a 44% Nose Dive in 2008
2007-11-20
By Greg McCoach

DENVER, CO--China, the world's largest copper consumer, produced a record tonnage of the industrial metal in October to meet rising demand from builders. Consequently, refined copper imports to the world's fastest-growing major economy may take a nosedive.

Data from China's National Bureau of Statistics released over the weekend put total Chinese copper output at 358,000 tons during October. Production showed an increase of 15% from September and a 43% increase from October 2006.

The following table lists China's production of copper and other non-ferrous metals in October and for the first ten months of 2007.


*Figures are in tons and percentage changes are from a year earlier.
In the first nine months of this year, China's refined copper imports have surged 98.1% to 1.2 million tons because of attractive margins for imports in the first half. Exports, on the other hand, fell 59% to 93,375 tons, making net inflows at 1.1 million tons.

It's estimated that China will consume between 4.25 and 4.5 million tons of refined copper for the year, an increase of +9% over 2006. But by the end of 2007, data crunchers believe China may still end up with a surplus of up to 360,000 tons of refined copper versus a deficit of 260,000 tons last year.

This surplus might encourage merchants to book fewer term copper imports for 2008 leaving many who are betting on China's rising consumption out in the cold.

In 2008, it's estimated that China's consumption of refined copper will increase 8% to 4.58 million tons. However, officials are also expecting output to continue to increase 15% to 3.9 million tons, putting the country's net imports at 680,000 tons next year. This would be 44% lower than this year.

An analyst from the Beijing Antaike Information Development Co., a state-owned research group, said that China built stocks of 427,000 tons in the first eight months of 2007 and the country added at least 500,000 tons of refined copper capacity in the second half of the year.

Smelters have increased overseas purchases of raw material, both concentrate and scrap, to feed their production during 2007. But increased domestic supplies may lead to a plunge in overseas purchases from the world’s fastest-growing major economy. Be careful of companies banking on exporting copper to China.