Copper hits a crossroads

RDX : 很重要 行業的轉折往往也就是投資的機會

Chinese use after pre-Olympic cutback seen as key for metal

By ALLEN SYKORA
THE WALL STREET JOURNAL ASIA
August 25, 2008

All Olympic gold, silver and bronze medals of the Beijing games have been delivered to athletes, but there is a new focus on China: whether it will build up a count of another kind of metal, copper.

China has become the world's largest copper user, accounting for roughly a quarter of global consumption. China's copper imports had tapered off, but some metal analysts believe China will return to a more normal industrial production after many plants were shut down to avoid air pollution ahead of the Games.

Others look for China's demand to eventually rise, because industry will have to resume stocking after running down inventories. While prices have dropped, which could boost demand, economic growth there appears to have slowed, which might curb buying.

"China is going to be the key here," said Bill O'Neill, one of the principals with Logic Advisors.

The country's imports of refined copper during the first half of 2008 fell 23% on the year to 687,013 metric tons, according to Chinese data.

Observers cited several factors that account for the slowing of Chinese copper-import demand, starting with an inventory drawdown when global prices were high and continuing with the shutdown of some industrial activity ahead of the Olympics.

"I think we'll see demand pick up after the Olympics," said Brian Hicks, co-manager of U.S. Global Investors' Global Resources Fund. "Much of that slowdown of imports into China is due to the fact they have been living off of their own domestic stockpiles of copper. It appears those stockpiles are starting to decline significantly."