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GLENCORE SEES COPPER DEFICIT (extract)
Chinese copper consumption has grown at an average of 16 per cent year over year from August to October, according to calculations this month by Jefferies.
One of the reasons has been the lack of scrap in the country, according to Mr Mistakidis, which means this has to be replaced with copper cathode, or refined metal. Jefferies estimates China’s imports of scrap have fallen 10 per cent over the past year.
China’s State Reserve Bureau, a customer of Glencore, has also been buying this year but not as much as the 700,000 tonnes suggested by some reports, Mr Mistakidis said.
“If you look at how they operate it has changed very much under the new regime. It’s a completely new team there, they’re much more open,” he said.
On the supply side of the equation there are an increasing number of potential supply disruptions.
BHP Billiton has flagged lower output at Escondida, the world’s biggest copper mine, because of declining ore grade.
Rio Tinto also said last week its production of the red metal would drop to 500,000-535,000 tonnes next year, from 615,000 tonnes, mainly because of rehabilitation work at its Kennecott operation in Utah.