CHINESE copper inventories recorded their largest weekly decline this year as a sharp fall in prices triggered by the Iran war spurred a surge in demand from fabricators, said Bloomberg News on Monday.
Refined copper stocks across China fell by 78,700 tons in the week through Monday to 486,200 tons, said the newswire citing Mysteel Global. Fabricators stepped up purchases following a surge in new orders, the research firm said.
Copper has fallen about 12% on the London Metal Exchange this month as the Middle East conflict stokes fears of rising inflation and slowing global growth. Demand has also been supported by manufacturers restocking after the Lunar New Year break in late February, said Bloomberg News.
Zhejiang Hailiang, a major Chinese producer of copper tubes and rods, has tripled its daily purchases of refined metal from last year’s average after domestic prices fell below 100,000 yuan a ton, said senior analyst Yan Yuhao.
Many rod producers are seeing full order books into next month and are considering running beyond designed capacity, he added.
Processing fees for copper rods rose last week on the back of the order surge, Mysteel said.
Ivanhoe Mines CEO Robert Friedland was quoted by the Financial Times as saying on March 5 that copper production across Africa faced serious disruption if the conflict in Iran continued beyond three weeks. This was owing to the continent’s heavy reliance on Middle Eastern sulphur supplies, the UK newspaper said.
