LONDON A deteriorating economic outlook and the damaging consequences for Chinese metal goods exports to the United States and Europe will undermine the country's demand for copper next year, a Reuters survey showed.
The survey of 10 analysts carried out over the last week showed real Chinese copper demand, which excludes metal bought for stockpiling, will grow 6.3 percent in 2012.
Some analysts had previously estimated real demand growth for the metal used widely by the power and construction industries, in the region of 7-9 percent for next year.
"There's fear about Europe and concern that the United States is slowing ... We're in a global world and ultimately you have to look at the global picture," said Stephen Briggs, analyst at BNP Paribas.
"Everybody says China accounts for 40 percent of global copper demand, that overstates the country's role because the copper goods are made in China, but ultimately they are consumed elsewhere."
Total global copper demand is estimated at around 20 million tonnes this year.
The euro zone debt crisis, politicians' failure so far to resolve the banking crisis and the risk of default in countries such as Greece, Portugal and Ireland are all expected to knock economic activity in the region.
Some recent data from the United States has shown signs of an activity pick up, but economists are wary of predicting strong growth. Stagnation is probably the best that the world's largest economy can hope for over the next year, they say.
Forecasts for next year's real demand growth ranged between four and eight percent, while those for apparent demand, which includes stockbuilding, ranged between 6 and 12 percent.
The average of 8 forecasts for apparent demand next year was 7.8 percent.
"China's market participants have drawn on refined copper inventories to the tune of 380,000 tonnes in recent months. This has reduced excess stocks to around 300,000," said Michael Widmer, analyst at Bank of America Merrill Lynch.
"Although some inventory replenishment is possible, given the current market metrics and China's tight monetary policy, it would be unusual if recent import increases represented the start of a sustained stock rebuild.
China's monthly imports of unwrought copper and semi-finished copper products rose 11.8 percent in September to a 16-month high.
The country's copper imports dwindled earlier this year as benchmark prices on the London Metal Exchange hit a record high of $10,190 a tonne in February. Prices are now around $7,340 a tonne.
Standard Bank analyst Leon Westgate has revised down his forecast for apparent Chinese copper demand growth for next year to seven percent from eight percent previously.
"Our (previous) forecast ... assumed the start of restocking late this year, spilling over into first half next year," Westgate said.
"It also did not factor in recessionary demand conditions in Europe and the United States. Chinese buying is highly price-sensitive and we do not expect current activity to morph into a major restocking episode."
Third quarter economic growth in the world's second largest economy slowed to 9.1 percent from a year earlier, the third consecutive quarterly slowdown in growth after 9.5 percent in the second quarter and 9.7 percent in the first.
But those numbers are still high enough to ensure Chinese copper demand overall remains robust, particularly given the government's commitment to construction and infrastructure development.
"Production of power cables, for example, is up 30 percent year-to-date ... Clearly, fabricators' usage of cathode remains high overall, and so their inventories continue to be run down, Westgate said.
"They just appear to have neither the will nor financial capacity to embark on any significant sustainable restocking campaign, yet."
(Additional reporting by Marie-Louise Gumuchian and Alessandra Prentice; editing by Keiron Henderson; Graphics by Vincent Flasseur)
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