Half of China's Copper Tube/Pipe Producers Consider Post-Holiday Copper Prices Unpredictable

BEIJING (SMM): Half of Chinese copper tube/pipe producers said the outlook for copper prices is cloudy, SMM’s latest survey of 20 producers shows.

On the bright side, copper consumption will improve in March. Manufacturing activities and infrastructure construction typically pick up from March through May. HSBC’s China manufacturing PMI rebounded to 50.1 in February, a 4-month high. The figure is expected to rise further in March. Infrastructure construction will accelerate in late Q1 or Q2 to stimulate economic growth. China’s “one belt, one road” strategy will be implemented after the NPC & CPPCC meetings in March. Moreover, manufacturing activities in the euro zone and the US are recovering, also boosting demand for the red metal.

On the negative side, however, Goldman Sachs recently blamed weakness in copper prices on weak demand, growing supply and falling costs. Copper stocks in Chile – the world’s top copper producer – grew over 170,000 tonnes in H2 2014 to hit the highest in over a decade, except a brief period in 2013. Global copper supply is in surplus by about 500,000 tonnes. With copper stocks growing steadily, copper prices will come under heavy downward pressure. Besides, a potential rise in the US dollar index will also weigh on the red metal.

Courtesy: www.metal.com