Chinese fundamental copper demand strong* Chinese demand stronger than expected, analysts say
*Copper should average $3.50/lb in 2010, $4.00/lb in 2011
*Chinese refined copper imports seen down 27 pct in 2010
(In U.S. dollars, unless noted)
By Cameron French
TORONTO, Feb 23 (Reuters) -Chinese fundamental demand for copper is growing at a faster-than-expected rate and should underpin higher-than-consensus prices this year and next, Desjardins Securities said on Tuesday.
In a note, analysts John Redstone and John Hughes said copper stockpiles China are declining swiftly and that many in the market are wrong in thinking that speculation, rather than fundamental demand, has underpinned imports of copper into China.
"Fundamental demand for copper in China far exceeds general expectations," they said, disagreeing with concerns that the country is awash with hidden metal inventory held by both speculators and metals consumers.
"Almost all of the hypothesized excess copper inventories are rumored,unsubstantiated, based on speculation or anecdotal in nature," they said.
Instead,they point to data showing accelerating production of Chinese copper semi-fabricated products -- which is the main use for copper in China -- along with Chinese domestic copper prices that are 5-10 percent higher than current London prices as reasons to suspect continued strong demand.
Rest of the story here: https://communities.thomsonreuters.com/BaseMetals/499055