U.S. Copper Imports Should Remain Strong Throughout Year
Source: Reuters, Jasmin Melvin (5/14/09)
"For the first three months of 2009, U.S. refined copper imports surged nearly 32% from a year ago."
The uptrend in imports of the key industrial metal, widely used in construction and automobile manufacturing, is expected to continue in the coming months. Analysts see it as a good sign for the economy.
"You're starting to see some of the stimulus taking place," said Michael Gross, futures analyst with Optionsellers.com in Tampa, Florida.
Imports of copper jumped 18 percent to 79,975 tonnes in March from 67,725 tons in February, the U.S. International Trade Commission said.
For the first three months of 2009, U.S. refined copper imports surged nearly 32% from a year ago.
Federal stimulus money is reaching communities across the country as part of the Obama Administration's $787 billion spending and tax cut package. Signs of economic recovery should make U.S. manufacturers more optimistic, boosting demand for copper and leading to strong second-half growth, Gross predicted.
Warmer spring and summer weather will also mean a pickup in U.S. construction, which should also boost copper imports. The U.S. Commerce Department reported this month that construction spending rose in March for the first time in six months.
The data lifts hopes that the housing industry slump could be moderating. Building construction accounts for more than 40% of all copper use, with the average U.S. family home containing 439 pounds of copper.
The tight scrap market is also putting pressure on U.S. copper supplies.
"There's not a lot of scrap being generated, which is the reason why some people are using cathodes in substitution for high-grade scrap," said Marc Kaplan, president of Mews Metals Trading. Slower industrial output sharply cut scrap metal availability, so more people are turning to refined copper, or cathode.
Rising U.S. copper demand coincides with China's growing appetite for the red metal, which could add price pressure. China reported that its copper imports rose 6.6% to a record 399,833 tons in April, as it continues to stockpile metals.
"When a recovery starts, it will start in China, and that appears to be happening now," Gross said.