www.ChinaPost.com.tw


China metals output surges on Q1 demand

Saturday, April 21, 2007
By Xiaowei Li BEIJING, Bloomberg


China's production of metals for its power, manufacturing and construction industries surged in the first quarter as investors speculated that demand in the world's fastest-growing major economy may spur further growth.

Production of aluminum, a lightweight metal used in car and plane parts, rose 37 percent from the same period last year, while that of copper, used to make wires and pipes, rose 4.2 percent, the National Bureau of Statistics said in a faxed statement Friday.

China has been expanding production of raw materials to supply an economy that has grown by an average of about 9 percent a year for the past decade, and to take advantage of soaring prices. Further cooling measures are expected as the government tries to slow production driven by demand for infrastructure projects, cars, household appliances and electrical goods.

"Growth in the production of metals, especially aluminum and copper, is expected to be sustained in the next quarter and throughout the year on continued demand," said Huang Shoufeng, an analyst at Jinrui Futures Co., Friday.

Premier Wen Jiabao is trying to stop cash from a record trade surplus from overheating the economy, which grew 11.1 percent in the first three months of the year, even with borrowing costs near an eight-year high. Interest rates may rise further this year, according to a survey by Bloomberg News.

Metals prices fell Thursday on concern that Chinese demand might be curbed by possible moves by the government to rein in growth. London Metal Exchange copper for delivery in three months dropped 2 percent to US$7,825 a metric ton.

"We do expect further efforts by the Chinese to slow growth of energy-intensive and polluting metals processing businesses," UBS AG investment bank wrote in a research note Thursday.

Still, copper prices recouped some losses Friday as global stockpiles of the metal fell for a third day to their lowest since Jan. 25 and production at the world's second-biggest copper mine in Indonesia was disrupted by a protest over wages.

Copper, which has risen 41 percent in the past three months, gained 1 percent to US$7,900 a ton at 2:03 p.m. Shanghai time.

Demand for copper in China, the world's largest user, may rise 10 percent this year, faster than in 2006, as the nation expands its electricity-generation capacity, London-based metals consulting CRU said Thursday.

Copyright © 2008 The China Post.
Back to Story