Europe’s copper demand is getting support from growth of about 2 percent this year in Germany’s construction industry, according to Aurubis AG, the world’s second-biggest refined copper producer.
Copper demand won’t pick up until the start of 2013, Peter Willbrandt, chief executive officer, said in an interview in London today. Aurubis’s wire rod sales fell 20 percent in the year ended Sept. 30 and sales of strips, sheets and plates were unchanged from the year-earlier period, he said.
“We expect construction, the electronic industry and the renewable energy will foster demand,” Willbrandt said of Germany. “Demand from the German automotive sector is still good.”
Hamburg-based Aurubis cut the premium for buyers in the region by $4 to $86 a ton in June and will keep the fee at that level next year to support demand, Michaela Hessling, a company spokeswoman, said Oct. 8. Germany was the third-biggest copper consumer in 2011, according to London-based researcher CRU.
Aurubis produced 1.147 million metric tons of copper cathodes in the fiscal year that ended Sept. 30 and plans to keep output unchanged this year, Willbrandt said. It’s operating at full capacity for cathode output, he said.
Copper treatment and refining charges for next year will probably increase to more than $70 a ton and 7 cents a pound and even close to $80 a ton and 8 cents a pound, Willbrandt said. They are now $70 a ton and 7 cents a pound, he said.
“There weren’t that many strikes, there are new mines coming on stream,” Willbrandt said. “The capacity of smelters is increasing but the utilization will be at a lower level so we will see a better concentrate supply.”
Willbrandt is in London for LME week, an annual event during which supply contracts are discussed. He expects transactions for deliveries next year to conclude in the next few weeks. Consumers are “trying to have as low copper inventories as possible” and are ordering metal on a very short-term notice, he said.
Copper stockpiles monitored by the London Metal Exchange dropped 43 percent this year, exchange data showed today. About 51 percent of stockpiles are in the U.S., while European stockpiles are down 63 percent this year.
“Inventories on the LME are very low in Europe,” Willbrandt said. “I cannot see that this situation will change in the next couple of months.” Long waiting times for metal at warehouses monitored by the London Metal Exchange is “an issue in the metals market,” he said.
Codelco, of Chile, is the largest refined copper producer.