LONDON COPPER SLIPS ON WEAK CHINESE DEMAND
London copper slipped on Tuesday, undermined by a slow recovery in Chinese demand after last month’s Lunar New Year, although a softer dollar stemmed losses.
Appetite for copper should however increase due to China’s investment plans for its national grid, given that power cable is a major use for the conductive metal, said Chunlan Li of minerals consultancy CRU in Beijing.
“That does not necessarily mean you will end up with 21 per cent growth, but it suggests the grid company is trying to spend more this year … We expect the market to tighten up in the second half because demand is going to recover further and supply growth is expected to be lower then,’’ Li said.
The president of China’s state power grid company vowed during the recent party congress to boost investment in power infrastructure this year.
Three-month copper on the London Metal Exchange slipped by 0.5 per cent to $5,816.50 a tonne by 0721 GMT after closing nearly flat in the previous session.
Prices have been trapped in a range from 5-1/2-year lows below $5,400 a tonne hit in January to just shy of $6,000 in early March.
Copper touched $5,900 a tonne on Friday, the loftiest since March 3, as traders looked for stronger demand to emerge from top consumer China after last month’s Lunar New Year holidays.
“There’s some demand recently, but from trading houses only,’’ said a physical trader in Singapore.
The most-traded May copper contract on the Shanghai Futures Exchange dropped 0.5 per cent to 42,430 yuan ($6,788) a tonne. Bonded Shanghai copper premiums dropped $5.50 to $85-$100, reflecting the slow physical demand.
CRU estimates bonded stocks in China climbed by 20,000 tonnes over February to 620,000 T this week.
The euro stood firm after soft U.S. data and edginess ahead of this week’s Federal Reserve policy meeting dented the dollar’s rally.
In news, Indonesia has lost its tight grip on the global tin market as a history of shutting off exports to prop up prices has pushed away buyers, weakening its ability to drive up prices from current two-and-a-half year lows.
Also, a move by the LME to potentially stop issuing warrants for metal stored in warehouses in Malaysia due to planned tax reforms could push more shipments into neighbouring Singapore.
DEVELOPMENT OF BHAVANAPADU PORT TO SPUR ECONOMIC ACTIVITY
The economic activity in Srikakulam district of Andhra Pradesh is expected to get a boost as Chandrababu Naidu-led TDP government in the state has decided to develop the Bhavanapadu port, which is one among the wish-list submitted by the trade to the Union government.
It is learnt that the state government has directed the officials to verify the land availability in Santabommali mandal.
The major outward shipments from this port are likely to be perfumes, textiles, among other things, sources said.
It is anticipated that around 200 million tonnes (mt) of cargo would be handled by 2019-2020, with the development of new ports in Andhra Pradesh as per a document prepared by the state government.
The officials indicated that the government would need to acquire private land if necessary because 2,000 acres was required for the development of a full-fledged port.
Infrastructure Corporation of Andhra Pradesh has sought Expression of Interest from interested companies for the development of the project in PPP mode, sources pointed out.
WELSPUN BAGS 100 MW SOLAR POWER PROJECT IN TAMIL NADU
WELSPUN Renewables recently signed a power purchase agreement (PPA) with the Tamil Nadu Generation and Distribution Corporation (Tangedco) to set up a 100-MW solar power project in the state.
The development comes as part of the 146 MW of PPAs signed by the government thus far under the existing solar power purchase programme.
Under the scheme, Tangedco would purchase power from developers at a rate of Rs 7.01 per kWhr, but only in cases where the project has been set up before September this year.
Welspun wanted to develop around 300 MWprojects under this scheme. However, like many other solar power developers, the company says it may not be possible to complete more projects within the September deadline.
CHINA STATE OWNED STEELMAKER PLANS CLOSURE AS OVERCAPACITY BITES
Reuters reported that a state owned Chinese steelmaker will close most of its facilities after falling steel prices forced it to halt production and lay off workers, a sign of the damage that persistent overcapacity is doing to the sector.
Pangang Group Chengdu Steel & Vanadium Company, a subsidiary of Panzhihua Steel in China’s southwestern Sichuan province, will halt production later this month after suffering huge losses.
A mill official and industry sources said that Chinese steelmakers are expected to face more headwinds this year, due to soaring environmental costs, overcapacity and slower demand growth in the world’s top consumer. More inefficient mills are likely to shut down permanently.
This post was written by Atlantic Admin