China copper confidence contrasts with aluminium woe
Capacity is dividing China’s metals producers, with the country’s top copper refiner looking for an upturn in a balanced market and the leading aluminum firm hoping things will not get worse.Aluminium smelters, like China’s steel mills, are suffering from huge overcapacity and now face prices below production costs, forcing many to shut in capacity."Oversupply and overcapacity in the aluminium industry in China will continue in 2009 and lower international prices of aluminium would open the door to more imports of the metal into China," Wen Xianjun, vice-chairman of China Nonferrous Metals Industry Association, said at a conference in Shanghai."Therefore domestic aluminium prices are not likely to rise in 2009," he said.The scenario by Wang Chiwei, executive director at China’s top refiner Jiangxi Copper, was starkly different."I am bullish on long-term copper prices. If the economic environment improves, investors will select profitable markets to invest in and the copper market is one of them," he told reporters on the sidelines of the industry conference.China is the world’s top producer of copper but still produces less than it needs. Jiangxi Copper plans to lift refined copper output 12 percent in 2009 to 800,000 tons, Wang said."That’s the difference between copper smelters and other base metals smelters. Aluminium smelters have huge stockpiles and aluminium prices have fallen steeply so the government can buy aluminium at a premium price."