Markets

Copper demand set to grow

By Matthew Craze (China Daily)
Updated: 2011-04-07 14:51

China will account for half of the globe's requirement within 10 years

SANTIAGO, Chile - Freeport-McMoRan Copper & Gold Inc said it's confident Chinese copper demand will continue to rise even as the nation hikes interest rates to cool inflation.

"China has done a remarkably good job of managing the extraordinary growth that they have," Freeport Chief Executive Officer Richard Adkerson said on Tuesday in an interview in Santiago, Chile. "In the long run we are very confident about the outlook for copper demand in China."

China will account for half of the world's copper demand by 2020, John MacKenzie, head of Anglo American Plc's copper business, said in a presentation in Santiago on Tuesday. There will be a "huge" increase in infrastructure spending in emerging countries, he said.

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China is the world's largest copper consumer and the metal demand is surging as the nation seeks to build more homes, autos and appliances, and upgrade power-grid networks as swathes of the rural population move to its cities.

"The government is focusing enormously on making sure that the vast rural population and those that are not among the new wealthy middle class are not left behind," Michael Lion, the head of the Asian unit of New York-based Sims Metal Management Ltd, the world's largest metals recycler, said on Tuesday at a conference in Santiago.

"The greatest focus for achieving that will undoubtedly be provisions such as electricity. That may provide a fairly consistent demand for copper."

China's industries are still growing 10 percent each year, while US and European copper demand is also recovering, according to Adkerson.

"The business community in the United States is more optimistic than it was a year ago," he said.

Freeport rose 76 cents, or 1.4 percent, to $56.53 as of 2:48 pm in New York on Tuesday. The stock fell about 4.6 percent this year, compared with a 6.1 percent gain for the Standard & Poor's 500 Index of which it's a member.

Bloomberg News