Copper output in China, the largest producer, may grow at a slower pace than expected this year on tightening supplies of imported scrap metal, according to Beijing Antaike Information Development Co.
Production may be about six million metric tons versus the November forecast of 6.1 million tons, said Yang Changhua, a Beijing-based analyst at the researcher. Output last year was 5.6 million tons, Antaike estimates.
Premiums for imported copper remained near an all-time high in China as the domestic output slumped on tight supplies of scrap metal and smelter maintenance. Copper imports by the world’s biggest consumer rose for a third month in July, touching a 10-month high.
“The tightness of scrap copper restrains smelters from raising production further this year,” Yang, who has studied the market in China for 15 years, said yesterday in a phone interview.
Output fell to a five-month low of 534,600 tons in July, according to SMM Information & Technology Co. Production may pick up in the fourth quarter after a drop in July and August, Yang said.
Copper fell 7.6 percent this year on concern that supply would exceed demand. Metal for delivery in three months on the London Metal Exchange was little changed at $7,326.75 a ton at 9:16 a.m. in Shanghai. The contract for delivery in December was at 52,710 yuan a ton on the Shanghai Futures Exchange.
China’s metals demand will remain steady this year even as growth slows, Antaike said last month. Prices in Shanghai were about $25 a ton more expensive than in London on average in June and July, calculations by Bloomberg show.
Scrap copper imports dropped 19 percent to 349,405 tons in July, while arrivals of concentrates jumped to a record 938,503 tons, according to data from the General Administration of Customs and Bloomberg calculation.
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