Wednesday, 21 Jan 2015
A state-backed research firm said that record investment in China's state power grid is set to boost copper consumption in the power sector this year by around 9%, a positive piece of news for a metal languishing near 5-1/2 year lows.
The forecast by research firm Antaike comes after state media reported on Friday that the power grid plans to invest CNY 420 billion in 2015 up 24% from last year. The power sector accounted for nearly half of an estimated 8.7 million tonne of refined copper consumption last year in the world's top consumer and producer of the metal.
Mr Ivan Szpakowski, Citi analyst, said that “It definitely matters for your outlook on copper demand growth, given they are the largest consumer.” Analysts are divided over whether China's grid completed all its planned 14% spending increase last year, given graft investigations hindered payments to grid suppliers.
Mr Yang Changhua, a senior analyst at Antaike, said that grid investment this year should push copper consumption in the power sector up 8.7% to 4.62 million tonne, picking up from 7.6% growth in 2014. Mr Yang said that Antaike had anticipated strong growth in demand from the power sector, where copper is used in transmission cables and transformers.
