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People's Republic of accumulating reserves of copper

31 December 2013

Perhaps the saying «Republic of China accumulates reserves» — the best investors in the world copper market. It is important to add that in recent years this situation has changed.

As the undisputed leader in terms of consumption of copper, the Republic of China has been actively imported copper concentrates extracted by enrichment of a special copper-bearing ore. Presented to your attention materials invariably collects local copper producers. But most importantly, at the moment it will be enough for more than a couple of months, and this is fraught with the formation of «surplus» in the conditions of excess supply in the global market for refined copper.

Copper stocks in the People's Republic of China — albeit erratic, but a key factor in the international copper market. Close to investors is difficult to obtain reliable information on the total quantity of refined copper located on the local warehouses.

It is noteworthy that the global market participants nevertheless drew attention to the changes taking place in the reserves. According strategist Metals — Leon contained copper in concentrates excess reserves can be used within a few months, but three or four weeks, as it was before.

In 2013, the Chinese government has put into operation a large number of new factories, specializing in the production of metallic copper. No doubt remains, it is a kind of safety net in the event that deliveries have any interruptions. Bear in mind that the products are of new plants at the initial stage does not meet international standards of quality and will be processed. For this reason, copper stocks such enterprises are processed more slowly than in the plants operating for a certain time.

As it turns out, having sufficient reserves of copper ore, Chinese manufacturers are perfectly prepared for a possible increase in demand. So, if at some point in time the demand is still to recover, then this factor will not have a significant support to end copper prices. In fact, the metal already exists in China, can only transform it, but it does not lead to an increase in copper prices on the world market. At the same time over the past 2013th year cost of copper has decreased by 12% Th.

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