Japan’s output of copper and copper- alloy fabricated products may total 700,000 metric tons this fiscal year, 17 percent more than initially forecast on higher Chinese demand, the Japan Copper and Brass Association said.
“After reducing stockpiles, we are unable to meet all of the recent increased orders,” Hiroyuki Nakayama, the group’s chairman, said in an interview yesterday. The association had forecast output in the year from April 1 of 600,000 tons compared with last year’s 806,927 tons, the lowest since 1982.
China has pledged 4 trillion yuan ($586 billion) in stimulus spending to bolster the economy, pumping money into railways and low-cost housing and boosting metals demand. Copper futures have surged about 49 percent this year, and China’s imports rose to a record for a third month in April.
“Thanks to strong demand in China, metal producers and processors in Japan and Korea could offset slumping domestic sales through exports to the neighboring country,” Lee Won Jae, an analyst with SK Securities Co., said by telephone today from Seoul. “This will continue for the time being as China’s own production rates for those cannot meet demand growth.”
There’s been an improvement in demand from the auto and semiconductor industries, especially for exports to China, since the start of April, Nakayama said. “Stimulus packages certainly have an impact on this improvement,” he said, citing extra state spending in China, Japan and the U.S.
Nakayama’s remarks echo May 18 comments from Mitsui Mining & Smelting Co., Japan’s largest zinc producer, that China’s stimulus was raising overseas demand. Japan’s zinc exports may gain 14 percent this year, according to Nobuyuki Nakamoto, general manager of Mitsui Mining’s zinc business department.
“Output hit a bottom in the January-to-March period,” Nakayama said yesterday. “Output may recover to at least 70 percent within the first half,” he said, adding that the percentage is based on average annual output of 1 million tons.
Copper imports by China in April rose 7 percent from the previous month to a record 399,833 tons, the Beijing-based customs office said on May 12, citing preliminary data. China’s urban fixed-asset investment rose 30.5 percent in the first four months as the government ramped up spending.
China’s apparent consumption of copper in the first four months climbed 40 percent from a year ago, Jim Lennon, senior commodities strategist at Macquarie Bank Ltd., said on May 13. Lennon reduced the bank’s forecast for this year’s global copper surplus to 500,000 tons from 900,000 tons.
Source: Bloomberg
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