Vedanta pays $246 million to regain Zambia copper mines
The metals and energy major plans to ramp up copper production from the mines to 300,000 tons a year and cobalt output to 6,000 tons.
Platts reports while China’s copper consumption is forecast to continue to rise this year, the news for copper miners exporting to the globe’s number one user of the metal is dire.
The market news provider quotes Beijing Antaike, a goverment-run market research firm, as saying Wednesday China’s consumption will rise to 5.5% to 8.1 million tonnes in 2013 on the back of renewed infrastructure spending especially in the electricity sector, but that a rise in domestic production will outstrip those gains.
Antaike estimates the country’s copper output at over 6 million tonnes, an increase of 9% from last year.
The changing dynamic means imports could fall by as much as 17% to 2.8 million tonnes from 3.4 million tonnes in 2012.
Longer term most analysts are still bullish on the prospects for the copper price.
“Near-term supply constraints combined with demand from ongoing urbanization and infrastructure build-outs in China and many other emerging nations will continue to support strong copper prices on a two- to three-year horizon,” a Scotiabank analyst told the Financial Post recently.
Another wildcard in the copper market is the launch of new copper exchange traded funds.
Many believe ETFs would not have nearly the impact on copper as these investment vehicles had on precious metals, but at least one investment bank has forecast a ‘significant’ market deficit by 2016 in part because these funds could buy up copper to the tune of 62,000 tonnes per year.
The spot copper price was $3.65 per pound on Wednesday, up 7% compared to this time last year.
Marble statue of chairman Mao Zedong in Shaoshan, China by Hung Chung Chih / Shutterstock.com.
