China’s copper demand may be the highest in at least four years in 2011 as sales of home appliances and vehicles boost consumption of the metal, Tongling Nonferrous Metals Group Co., the nation’s second-largest copper producer, said.

Smelters in China are operating at more than 90 percent capacity and most are using more scrap material than usual because of high refined prices, Chairman Wei Jianghong told reporters in Beijing while attending the National People’s Congress.

Copper touched a record $10,190 a ton in London last month after surging 30 percent in 2010, as the global economy recovered from the worst recession since World War II. China, the world’s biggest consumer of copper, targets economic growth of 8 percent this year. Demand is rising as the nation upgrades networks, and builds more homes, autos and appliances.

“Overall, copper demand this year will be good - certainly it will be better than 2008, 2009 and 2010,” Wei said. He didn’t give a forecast. “Demand for rods and tubes are good, driven by higher sales of home appliances and vehicles.”

Sales of Chinese made vehicles will grow between 10 percent and 15 percent this year from 2010, the China Association of Automobile Manufacturers said in January. Copper demand in China may gain 7 percent in 2011 on economic growth, Jiangxi Copper Co. Chairman Li Yihuang said on March 5.

High Prices

“High copper prices have prompted miners globally to ramp up production. They are operating at full capacity, so copper material supplies are more available,” Wei said. “Scrap material supply also increased quickly,” and imports may continue to grow, he said.

Copper processing fees that miners pay smelters to make refined metal should rise in the second half and next year to reflect rising copper prices and more availability of copper materials, Wei said. Tongling’s purchase of copper concentrates accounts for 30 percent of China’s total imports a year, he said.

Still, Tongling is “concerned” that consistently high copper prices may prompt users to switch to aluminum substitutes, Wei said.

--Xiao Yu. Editors: Alan Soughley, Richard Dobson

To contact the reporter on this story: Yu Xiao in Beijing at [email protected]

To contact the editor responsible for this story: Andrew Hobbs at [email protected]

Source: http://www.bloomberg.com/news/2011-03-08/china-copper-demand-may-be-highest-since-2008-tongling-says-1-.html