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Whether copper supply will increase from China

27 January 2015

China's Ministry of Finance announced the government's decision to introduce a new tax credit. It will be imposed on export of certain products from copper. In addition, it provides for an increase in the size of the returned export duties on certain goods. Presumably, these measures are designed to increase the volume of deliveries of copper products from China. As provided by the Ministry of Finance data, the size of the tax credits in 2015 will amount to 9% of the export profiles and rods of copper. Tax credits will when exporting copper foil will increase from 13% to 17%.

Leaders of China's copper industry reacted to the decision of the government is good enough. In particular, the main Chinese manufacturer of copper rods, Jiangxi company is going to take full advantage of the benefits created. To this end, the company's management plans to increase exports, especially since the cost of copper products in the domestic market, lower than the world price. Also, representatives of the companies believe that the new prices will increase the domestic consumption of refined red metal used for production. It is expected that the domestic demand in 2015 will be increased by 6% compared to 2014 figures.

According to experts the state Antaike Information Company adopted the new tax credit will encourage the growth of export volumes of copper profiles, rods and bars, providing record levels. According to data published by the government, for 11mesyachny period of 2014, China exported 7945 thousand. Tons of copper rods and profiles.

Codelco Corporation, the world leader in copper production, plans to reduce the premium for the metal to Chinese customers. If in 2014 the premium amounted to 138 USD / ton, in 2015 it could be reduced to the level of 133 USD / ton. Today, China is a consumer of non-ferrous metals number 1 in the world. The demand from China is gradually reduced, slowing down the economic development of the country. Codelco also reducing premium increases thus the demand for their own products. In general, the global copper market is experiencing some difficulties. If in 2014, Goldman Sachs estimates experts excess copper was 353,000 tons, in 2015, the figure could rise to the level of 492,000 tonnes. The specialists of BHP Billiton suggested that after 2018 the world copper market will be in substantial deficit.

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