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Asia’s Dragon Looks to Scrap Metal Merchants for Quality Scrap Copper

China wants your copper.

Despite reports about the dragon economy’s slowdown a few months back, a spike in copper imports indicates otherwise. Indeed, demand for copper in China is higher than before. From roughly 250,000 tonnes in 1Q 2013, copper imports in 1Q 2014 now play around 350,000 tonnes.

What’s Dr Copper Saying

As for what purposes China has in mind for all that copper, one can easily surmise that the added supply will be used for various activities, from construction to the manufacture of electronic gadgets. Recent stimulus measures aimed at stabilizing the country’s economy also led to a manufacturing uptick. With a Purchasing Manager’s Index (PMI) of 52, China’s factories definitely need all the metals they can import.

Oddly enough, China leads the world in copper production, according to the U.S. International Trade Commission (USITC). In 2009, the country’s global share of copper production reached a little below 25 percent. Yet while the country continues to have a substantial inventory coming from its mines, it relies on imports more than ever.

The USITC paper, however, defines “primary production” as the processing of copper ores; it doesn’t say anything about domestic or foreign sources. China, in recent years, has struck mining deals in South America and Africa for copper ore. Meanwhile, Chile (24%), Peru (16%), and Australia (11%) ranked as the three largest exporters of copper to China as of 2011, with Peru set to take the top spot by 2016.

At any rate, China still finds use for scrap copper to supplement its stock of refined copper. A lot of manufacturers in the country rely on precious metals to mass produce mostly everything you own and use at home or in the workplace. That scrap copper from the old phone you just put in the recycling bin? It can end up in a new one.

Consequently, reputable scrap metal merchants like Global Resources International remain optimistic about scrap metal sales. Analysts are bullish about Australia’s expanding copper market, putting the forecast growth at 1.8 percent between 2014 and 2019. The top two copper exporters, the U.S. and Spain, are also expected to increase their output.

A lot can still change in the coming years; but for now, China’s hunger for useful metals is evident. Although economists believe the giant economy may stop “hoarding” copper once a slowdown becomes more evident, only time can tell. Take advantage of the spike in copper demand by selling scrap metal in St Marys to a firm like Global Resources International that offers competitive pricing for this resource.

(Source: “What’s Dr Copper Saying?” Money Morning, July 25, 2014)

About Rosalind Yu

Rosalind Yu has written 19 post in this blog.

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