Red-Hot Resources

"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”

Tuesday, March 27, 2007

The Tangled Web of Chinese Metal Supply/Demand

China Daily reported on Tuesday that nonferrous metal production in China is expected to grow by 15% in 2007. That's according to the China Nonferrous Metal Industry Association.

Well, 15% would be pretty darned good. Copper demand in China grew a whopping 9% in 2006 -- 15% supply growth would outpace demand growth.

But not so fast. Remember China Daily, as well as some other forecasting from China, says pretty much what the government wants it to say. And the Chinese government would like to talk the price of copper down.

Meanwhile, Codelco Executive President Jose Pablo Arellano, who runs the world's largest copper company, said last week that demand for the metal will continue to rise through next year because of "unimaginable'' new construction in China.

Hmm ... I can imagine a lot. Can't you? Arellano says that copper demand will remain strong for at least the next year and a half.

And here's some news from Bloomberg: China's imports of refined copper and alloys rose 12% in February over the previous month to 152,651 metric tonnes, as the country entered a peak period for copper demand, especially from the power and construction sectors.

I think the "peak" may be a little further off.

Labels: ,

Check out my new gold and energy blog at