Copper consumption is rising dramatically in China, Brazil and India. Copper imports are normally an indicator of economic activity. For the first five months of 2012, copper imports by China increased by 52% year on year as demand for the red metal continued to soar. China’s huge imports in the month of May further suggest firm demand from the world’s major commodity buyer.China’s copper imports surged 65% in May, as compared to the previous year, fuelling hopes of a pickup in growth. Copper imports climbed to 419,741 tonnes in May, 11.9% more than a month ago.
Analysts state that Chinese demand is likely to pick up in the coming months as authorities seek to stabilise the economy with new infrastructure measures. Though China’s industrial output and retail sales trailed estimates, analysts believe that the new home appliance and car purchase subsidies currently under consideration in the country should support copper demand.
China’s power consumption also mildly accelerated in May, a reflection of the faster than expected industrial activity. Electricity use rose 5.2% year on year in May to 406.1 billion kilowatt-hours, faster than April’s 3.7%.
Speaking about India,a broking firm analyst added that the weak rupee had helped cushion the downside. “There is growing demand for copper from India for industrial purposes; a rise in infrastructure development on a pan-India scale, as well as growth in the manufacturing sector.”
In 2011, China accounted for nearly 40% of the 19.74 million tonnes of refined copper used worldwide. Brazil too has emerged as a growing user of copper. From 2002 to 2008, per capita copper consumption in Brazil increased 50% to 2.1 kilograms, approximately 30% higher than the country’s GDP growth in those years. Though copper usage dropped in 2009 with the world economic decline, it rebounded in 2010 to 360,000 tonnes in Brazil and an estimated 400,000 tonnes in 2011.Brazil’s construction industry is using enormous amounts of copper as it builds homes for a growing middle class. India is also modernising and investing heavily in infrastructure and electrical power, which requires large amounts of copper.
In a report, Goldman Sachs has noted that fourth quarter copper demand will accelerate to between 10% and 15%, driven by an anticipated pickup in residential property sales in China, and solid automotive output growth. In India too, demand from the automobile sector would help increase copper consumption.
(Edited from anarticle by Shivom Seth posted at Mineweb.com.)