SHANGHAI: China's top maker of copper tubes, Golden Dragon Precise Copper Tube Group, expects 2013 production to rise by 14 percent from a year ago, as signs of an improving economy inspire cautious optimism, boosting orders at home and abroad.
China is the world's top copper consumer, accounting for 40 percent of refined demand last year. But subdued demand following a fall in manufacturing in Europe, its main export market, has led to record stockpiles, squeezing prices.
Golden Dragon, which makes copper tubes for air conditioning and autos among other uses, will produce about 400,000 tonnes of copper tubes in 2013, after a 5.4 percent fall in output this year to 350,000 tonnes, chairman Li Changjie said on Thursday.
That works out to about 5 percent of China's 2013 refined copper consumption of 8.1 million tonnes estimated by state-backed research firm Antaike, which Golden Dragon would need to buy in domestic and overseas markets.
"Copper consumption growth will be between 4 and 5 percent next year," Li told Reuters in an interview. That matches, or only slightly exceeds, this year's figure of 4 percent.
"Anything above that will be difficult to achieve because of economic restructuring and industry consolidation."
COPPER CATHODE IMPORTS
Golden Dragon would import 50,000 to 60,000 tonnes of copper cathode next year, an increase of 20 to 25 percent from this year's range of 40,000 to 50,000 tonnes, Li said, on the back of increased export orders from Europe, Japan and Southeast Asia.
The company, which already has a plant in Mexico and is building a 45,000 tonne-a-year facility in the United States, also wants to expand overseas production capacity to meet demand abroad and be closer to its customers, Li said.
China's economy, the world's second-largest, slowed for a seventh straight quarter in the period from July to September, missing a government target for the first time since the depths of the global financial crisis.
To deal with tough times, Li said, Golden Dragon had cut its inventories of both refined copper and finished products to rein in financing costs.
Some smaller tube producers had also been forced to shut due to poor demand and fierce competition, helping to ease a supply glut in the market.
China could stage a tepid economic rebound in the fourth quarter, driven by higher public infrastructure spending, but growth will remain lethargic through 2013, a Reuters poll showed.