Refined copper demand fluctuates in China

copper sheet, copper sheet

The latest data released by the Electricity Council of China shows that investment in the country's energy sector declined slightly in the first six months of 2014. The energy sector in 2013 accounted for almost 50 percent of the demand for copper in China, where it is almost impossible to buy copper sheet at a low price today.

Contrary to expectations, investment in new supply networks declined 0.6 percent in the first half of the year compared to last year. At the state-owned company Antaike, investment in the energy sector unexpectedly dropped in the first half of 2014, prompting a revision of previous copper demand forecasts for the current year.

Antaike plans to closely follow the investment cycle in the first months of the second half of this year. If investments in the energy sector fail to show signs of improvement, the projections may need to be reconciled. Government-backed research previously predicted that Chinese copper consumption would grow 6.7 percent year on year to 8.75 million tonnes.

The copper consumption situation is complicated by the fact that small and medium-sized producers in the country have recently been hit hard by the tight lending policies of Chinese banks after suspicions of improper use of loans. It is now difficult for importers to obtain a Letter of Credit (LC) of objects from banks, which forced them to delay the delivery date of overseas suppliers.

Analysts believe that the outlook for demand in China for refined copper in the second half of 2014 depends on new investments in the energy sector and the credit conditions of Chinese banks.