Copper price falls to new low
By Wang Zhenghua (China Daily)
Updated: 2006-06-13 17:05 Late last week, copper fell 8.3 per cent in London and 4 per cent in Shanghai
as central banks from Asia to Europe raised interest rates to curb inflation,
stoking concern that demand for the metal may falter as economic growth
slows.
But Wu Bowen, an analyst with Shanghai-based Jin Peng Futures Co,
expected a conspicuous rebound as early as tomorrow or Thursday, after the US
released its Consumer Price Index.
He attributed the slump in the copper
price to the biggest weekly drop of US stocks in more than a year amid concern
higher interest rates will curb economic expansion.
He also said that
falling demand for copper in the power sector might drag down the metal's prices
in the next two or three years.
"We have recently noticed that some
electric wire manufacturers, which traditionally used copper as a key material,
have a sluggish demand for the metal and their products haven't been selling
well," said Wu.
Last week, the National Development and Reform Commission
(NDRC), China's main economic planning body, said the country would reach a
balance between energy supply and demand in the second half of the
year.
The installed capacity of new power stations that came online in
the first four months of this year alone amounts to 22.39 gigawatts, with total
national capacity reaching 531 gigawatts, according to Zhang Guobao,
vice-miniter of the NDRC.
With other power stations in construction,
Zhang said capacity will rise by a total of more than 70 gigawatts by the end of
the year.
"If the country can really enhance its power supply, it might
be reluctant to approve the setting up of new power plants, and demand for
copper will fall," Wu said.
"That would be bad news for copper speculators,"
he added.
(For more biz stories, please visit Industry Updates)
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