SYDNEY, July 25 (Reuters) - Minmetals Resources Ltd , a unit of China’s biggest metals trader, on Wednesday said that new stimulus spending in China is set to lift the global copper market.
Copper prices have tumbled about 25 percent over the past 12 months, largely on weakening demand in China, the world’s largest importer and consumer of the metal.
It said the market for metals in China over the second quarter had been generally softer compared with 2011, underscored by declines in copper cathode imports that inflated London Metal Exchange inventories of the metal.
“However, China’s stocks have simultaneously reduced,” the company said. “Total exchange stocks at the end of the second quarter were lower than at the start of the April and amounted to only seven days’ global consumption.”
Premiums paid for imported copper cathode also improved toward the end of June, it added.
“Recent fiscal stimulus actions in China are expected to improve credit tightness and there are also expectations of increased spending on infrastructure and housing in the second half of 2012, resulting in improved Chinese copper demand,” the company said.
Chinese Premier Wen Jiabao has said Beijing needs to step up efforts to create jobs by spending more on infrastructure projects.
China’s annual economic growth slowed to 7.6 percent in the second quarter, just above the government’s 7.5 percent full year target and the weakest quarter since the first quarter of 2009.
Minmetals said it produced 31,931 tonnes of copper cathode and 6,429 tonnes of copper in concentrate in the second quarter, up 74 percent and 5 percent respectively from a year earlier.
The sharp rise in cathode output reflected production from the recently acquired Kinsevere mine in the Democratic Republic of Congo and higher operating levels at its Sepon mine in Laos, Minmetals said.
Hong Kong-listed Minmetals also said its Century zinc mine in Australia, the world’s third-largest and set to run dry by 2015, produced a record 141,382 tonnes in the second quarter, but warned that output would drop over the rest of the year.
Output over the quarter was up 6 percent on the previous quarter and 10 percent over the same period a year earlier, according to Minmetals.
“Planned maintenance will result in lower production in the second half of 2012,” Minmetals said. (Reporting by James Regan; Editing by Chris Lewis)