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Japan to Ship 8.5% Less Copper Cathode Than Expected in 2010











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By Jae Hur and Yasumasa Song
June 30 (Bloomberg) -- Japan, Asia’s biggest shipper of copper cathode, may export 8.5 percent less than previously forecast this year amid increased domestic demand and slowing Chinese demand growth, Pan Pacific Copper Co. said.
Japan’s biggest producer forecast exports of the refined copper will drop to 540,000 metric tons from an earlier estimate of 590,000 tons for 2010, Hidenori Kamoo, general manager of the marketing department, said in an interview yesterday. The new estimate is 14 percent less than record shipments in 2009, mostly to China, the biggest consumer of the metal.
The price of copper, used in pipes, tubes and wires, has jumped about 28 percent in the past year as stimulus measures helped the global economy. Japan’s Cabinet Office raised its economic growth forecast last week to 2.6 percent from 1.4 percent for the year ending March 31. That would be the fastest expansion in a decade.
“Domestic demand has been recovering, especially from the auto and semiconductor sectors,” Kamoo said. “Demand from the construction sector now appears to have hit bottom.”
The Japanese Electric Wire and Cable Makers’ Association said last week its cable shipments rose 11 percent in May from a year earlier, gaining for the fifth straight month, while the Japan Copper and Brass Association said its output jumped 50 percent in May, the seventh straight monthly increase.
Domestic Demand
Domestic demand may increase 14 percent from a year earlier to 1 million tons this year, Kamoo said. The company previously forecast demand of 950,000 tons for this year. Tight scrap- copper supplies have also led domestic alloy fabricated product makers to seek cathode, dragging stockpiles down, Kamoo said.
“There is also a shortage of scrap in South Korea, tightening overall copper supplies in East Asia,” he said.
Japan is expected to produce 1.5 million tons of copper in 2010, up from 1.44 million tons in 2009, he said.
The company plans to produce between 570,000 and 580,000 tons in the year started from April 1, exporting 40 percent of its output this year. China accounts for about 60 percent of its exports.
China’s copper consumption is projected to increase to 7 million tons in 2010 and 7.4 million tons in 2011, Kamoo said, citing data issued this month by the Beijing General Research Institute of Mining & Metallurgy. The country consumed 6 million tons in 2009.
In 2010, China’s copper demand is expected to grow 8 percent in the third quarter from the same period a year earlier and 7 percent in the fourth quarter after jumping 36 percent in the first quarter and 19 percent in the second quarter, according to the data.
China’s demand growth “will slow in the second half on a removal of export rebates, tightening monetary policy, the strengthening yuan and Europe’s sovereign-debt crisis,” said Kamoo, who visited China last week.
“That doesn’t mean China’s demand will disappear. Copper prices will remain bullish for the time being,” he said.