Tongling Positions Itself as World's Copper Capital

Tongling, a city in southern Anhui Province, is striving to make its copper industry an engine of growth and the envy of the world.

Copper may not be a particularly interesting metal for most people, but the city of Tongling in Anhui Province is striving to make itself the world's copper capital.

Yao Yuzhou, the secretary of the CPC Tongling Municipal Committee, Anhui Province.

"We aim to build Tongling into the copper city of the world, which incorporates smelting, deep processing, trade, research all for the development of copper," said Yao Yuzhou, the secretary of the CPC Tongling Municipal Committee.

The focus on copper has been included in the city's 12th Five Year Plan?2011-2015?; however, the city's present copper industry chain, which focuses on smelting and rough processing, is rather short, Yao said.

But increasingly the world needs much more copper. As currently estimated, the international demand for refined copper will double by 2025, with the yearly average growth at more than 4 percent. For China, the demand will be even greater?C perhaps twice the world's average growth by 2020.

In 2009, Tongling produced 570,000 tons of electrolytic copper, among which only 240,000 tons were locally consumed and the other 330,000 tons were directly sold outside the city.

"That's a pity! It's urgent for us to lengthen the industrial chain by enlarging the scale of present copper enterprises as well as speeding up industrial relocation from China's eastern cities and even abroad," Yao said. "If 70 to 90 percent of what we have produced could be locally consumed, that means more high-value-added copper products in Tongling."

According to Yao, Tongling Nonferrous Metals Group, China's second biggest copper producer and the second largest industrial enterprise in Anhui, had primary business revenue of 66.6 billion yuan in 2010, slightly less that that of Masteel?68.8 billion yuan?.

"To target the copper industry, we will strive to promote it as the first enterprise in Anhui Province whose primary business revenue will reach 100 billion yuan by 2012," Yao said.

Reuters reported that sellers of bonded copper in Shanghai may not get a premium in coming weeks as supply rises and China's credit tightening hit demand likely forcing them to consider re exports from the world's top copper consumer.

Traders said that the premiums, typically paid by buyers on top of London Metal Exchange spot copper prices and rose above USD 250 per tonne in 2009 now traded around USD 20 versus USD 30 to USD 70 per month earlier and USD 115 for 2011 shipments provided by the world's top copper producer Codelco. For Chinese less popular solvent-extraction electrowinning copper no premium was being required.

A warehousing source said that arrivals in January were not low and much of those were put into bonded warehouses. The firm's bonded copper stocks had risen by a quarter this year. The stock is copper that has arrived in China but has not paid the country's 17% value added tax in bonded warehouses.

Traders said that importers were holding off the VAT payments and leaving the metal in bonded warehouses as prices had been lower in the Chinese market than the cost of the imports. About 500,000 tonnes of refined copper cathodes may be stored in bonded warehouses in Shanghai after the poor arbitrage increased the storing of contracted arrivals in the past few months.

?Sourced from Reuters?

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