A new stage of China s Copper Consumption

Transcription

1 A new stage of China s Copper Consumption Zhong Min Vice General Manager Jinrui Futures Co.,Ltd, Jiangxi Copper Corporation 22/02/2013 1

2 A new stage of China s Copper Consumption Will the slow-up in China s demand in 2012 last? China s government policy and its effect on trade, investment and demand growth Will 2013 see destocking? Industry balances along the supply chain and implications for Chinese imports 22/02/2013 2

3 slow-up in China s demand in 2012 China s refined copper consumption in 2012 is 7.59 Mt-Cu, only 3.5% increased to Breakdown of China s Copper Consumption in 2012 Construction 9% Other 11% Electronic 8% Transport 10% Air cond 15% Power 47% 22/02/2013 3

4 Look back on China s Copper Consumption over the last 10 years. - Compounded Annual Growth rate of 11.31% on average China s Copper Consumption, , Mt-Cu Key factors to fast growth: China's fixed asset investment international manufacturing industry shifting to China 22/02/2013 4

5 8 Breakdown of China s Copper Consumption, , Mt-Cu Electricity Air cond Transport Electronic Construction Other Electricity industry consumes the largest percentage. 22/02/2013 5

6 25.0% Growth rate of China s Copper Consumption breakdown by industries, % 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% Electricity Air cond Transport Electronic Construction Total Growth rate reached the top on , due to government policies. 22/02/2013 6

7 12 Copper Products Consumption in China, Plates & Stripes Brass Rod profile Wire Foil Other Wire contributes the largest part of consumption and was the fastest growing section. 22/02/2013 7

8 95% 90% 85% 80% 75% 70% 65% 60% 55% 50% Capacity Utilization Rate of downstream production Brass Plate&Stripe&Foil Rod Wire Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Currently capacity still grows fast. 22/02/2013 8

9 15.00 China s GDP Growth Rate slow-up in China Economy Growth Industrialization Economy Growth Drivers Copper consumption Preliminary fixed asset investment and Copper consumption growth >= economy growth Manufactory Developing Service industry weighs more Copper consumption growth <= economy growth Developed Service Copper consumption growth stops Economy growth continue 22/02/2013 9

10 China GDP Growth Rate and China Copper consumption Growth Rate, Refined copper consume YoY GDP YoY GDP YoY Average 9.98% Cu Consumption YoY Average 11.12% Slow-up of China s GDP growth Copper consumption growth <= economy growth beginned JINRUI sees Copper consumption growth in China continue to remain low in the future. 22/02/

11 Copper Consumption per person kg/person/year Developing Route of Copper Consumption and GDP of 6 Countries GDP per person USD/person/year China( ) USA( ) Japan( ) German( ) South Koera( ) China Taiwan( ) 22/02/

12 A new stage of China s Copper Consumption Will the slow-up in China s demand in 2012 last? China s government policy and its effect on trade, investment and demand growth Will 2013 see destocking? Industry balances along the supply chain and implications for Chinese imports 22/02/

13 China s economy has avoided hard landing GDP quarter YoY Official manufacturing PMI composite indicator(rhl) /02/

14 China s Government Policies looking into 2013: A. Fiscal policy: aggressive Monetary policies: looser than expected B. Urbanization is the hot topic in C. International trading can hardly grow. D. There is a strong expectation on China s new leaders will to improve economy structure. 22/02/

15 Real estate industry has rebounded. Low income housing can be expected to contribute more to copper consumption. China Real Estate Index by NBSC Low-income Housing in Construction, million units /02/

16 Air conditioner industry is entering stocking period in China. The growth of auto product has been stable for years in China. Transportation construction especially high-speed rail would have a better growth in 2013 in China. 20 Air Conditioner Product, Million Units 2.50 China's Auto Product, Million units Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec /02/

17 Nuclear power could be a new driver of copper consumption in China. Copper consumption of electric power and electronic products in 2013 would be better than 2012 in China China's Electric Power Monthly Investment, Trillion Yuan Computer \ cell phone product, Million units Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Computer Cellphone /02/

18 A new stage of China s Copper Consumption Will the slow-up in China s demand in 2012 last? China s government policy and its effect on trade, investment and demand growth Will 2013 see destocking? Industry balances along the supply chain and implications for Chinese imports 22/02/

19 3.5 Refined Copper Inventory Estimated, Mt-Cu Copper production has been growing fast in the past years. When consumption fell, copper financing became popular. Customs regulations in the past was holding back refined copper export. 22/02/

20 JINRUI looks at 2013, copper financing goes down, so as import Monthly Net Increase of China s Boned Warehouse Cathode Inventory, Kt-Cu Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Currently on Feb 2013, inventory remained at Kt-Cu estimated. 22/02/

21 Refined Copper Export is becoming more stable 160,000 Refined Copper export and LME Korea Inventory China refined copper export LME copper stock in South korea(rhl) 140, , ,000 80,000 60,000 40,000 20, /02/

22 China s Refined Copper Production, Mt- Cu China Refined Copper Product Capasity, Mt-Cu & YoY, % Capacity Capacity YoY(RHS) JINRUI sees: Refined copper in China product will continue to grow fast. Refined copper consumption in China in 2013 will be better than in % YoY estimated. Destocking will take place in 2013, only in limited amount. 22/02/

23 A new stage of China s Copper Consumption Will the slow-up in China s demand in 2012 last? China s government policy and its effect on trade, investment and demand growth Will 2013 see destocking? Industry balances along the supply chain and implications for Chinese imports 22/02/

24 As copper concentrate market to shift to surplus, import would increase. Premium, Codelco to China, Refined Copper Year Premium(US$/Ton) Chinese Smelters TC/RC Unit:US$/Ton /02/

25 JINRUI sees in future about China: Conclusions A. Lower level of growth rate of China s copper consumption constantly in the future. B. 5.5% growth of refined copper consumption in 2013, compared to 3.5% in C. Due to the continuing urbanization and industrialization, China will remain the largest copper consumer for long. D. Limited amount of destocking in E. Compared to 2012, a limited improvement of China s economy in 2013, under challenges from global economy cycle and domestic economy structure. F. A growth on smelters capacity and concentrate import. A decrease on concentrate shortage as import will have a more considerable improvement. 22/02/

26 Thanks! Questions? Zhong Min Vice General Manager Jinrui Futures Co.,Ltd, Jiangxi Copper Corporation 22/02/