Analysis of China's Copper Market in 2011 and Outlook for 2012

Recently, Yang Changhua and He Xiaohui, analysts of Beijing Antaike Information Development Co., Ltd., respectively expressed their opinions on the supply and demand of China's copper market at the “China International Copper Forum” and “China International Mining Conference”. Antaike believes: According to incomplete statistics, 2011 From January to August of this year, the amount of investment in new projects started to fall in China's copper smelting industry fell slightly compared to the same period of last year, mainly due to the fact that the peak period of new start-ups occurred mainly in the previous two years; while the amount of investment in fixed assets completed during the same period increased significantly year-on-year, mainly due to the previous year. Two years of new production capacity has begun to gradually put into operation and production, and this domestic copper smelting production is expected to enter the peak period will continue into 2013. According to Antaike, the new domestic copper smelting and refining capacity in 2011 was 600,000 tons/year and 1,150,000 tons/year, respectively. The expansion of smelting and refining capacity has become an important driving factor in the growth of domestic refined copper production and an important factor in suppressing copper concentrate processing fees.

Antaike also believes that domestic copper consumption growth in 2011 mainly depends on the power industry and the air-conditioning and refrigeration industry. The real estate control policies have a significant impact on investment and start-up. The increase in automobile output continues to shrink. The amount of investment in railway infrastructure projects has dropped, and the demand for copper in the transportation industry has been hit. As a whole, it is expected that domestic refined copper consumption will increase by 8.5% to 7.38 million tons in 2011, an increase from last year.

An Taike summed up the main features of foreign trade of major copper products this year: refined copper imports continued to drop, and exports surged; raw copper and miscellaneous copper imports as raw materials increased, and copper concentrate imports fell slightly; copper processing materials entered and exported both decreased.

For 2012, Antaike expects domestic refined copper production to reach approximately 5.75 million tons, an increase of approximately 9.1% over 2011; refined copper consumption is expected to continue to grow, but the growth rate continues to decline, with refined copper consumption of approximately 7.85 million tons; Copper imports will be basically the same as 2011.