Copper may advance this year as consumption in China, the world’s biggest user of the metal used in wires and pipes, is poised to expand, said Li Baomin, chairman of Jiangxi Copper Co., China’s largest producer.
“Demand growth momentum is strong on expansion of urbanization,” said Li, whose promotion as chairman of the Jiangxi-based company was announced in Beijing on March 4. “Global copper market is expected to be in balance,” he said without giving a forecast for Chinese demand growth.
Copper use in China will jump 8 percent to a record 8.833 million metric tons this year, boosting global demand and creating a 6,000-ton product deficit, compared with a surplus of 216,000 tons in 2012, according to Goldman Sachs Group Inc. The metal tumbled 4.3 percent last month on the London Metal Exchange, erasing gains this year.
Copper may trade in a range of $8,000 a ton and $8,300 a ton this year with the average price of about $8,100, Li told reporters at the National People’s Congress in Beijing yesterday. The metal for delivery in three months rose 0.6 percent to $7768.25 a ton at 7:28 p.m. Beijing time yesterday.
Jiangxi may produce as much as 1.22 million tons of refined copper this year, compared with 1.2 million tons in 2012, Li said. Exports will depend on the price differential between Shanghai and London, he said.
Surplus copper in China was 1 million to 1.5 million tons last year, “far more significant than the reported 600,000-ton build in bonded warehouse inventory,” David B. Wilson, an analyst at Citigroup Inc., said in an e-mailed report March 4.
— With assistance by Helen Sun