Copper demand in South Korea, Asia’s third-biggest consumer, may decline this year compared with an increase predicted earlier as the economic recovery is not in sight, said an industry association.
The group had forecast a 2 percent gain in consumption of refined copper to 738,000 tons this year from 723,505 tons in 2012, Kim Soo Bong, director at the Korea Nonferrous Metal Association, said in an interview. While Kim said they will cut the December estimate soon to show no growth or a decrease, he declined to give a specific figure.
Copper, used to make wires and pipes, lost 5.8 percent in the past year in London as the economic slowdown in China, the world’s biggest user, and Europe’s debt crisis hurt the global economy and demand for metals. South Korea, Asia’s fourth- largest economy, lowered its growth forecast in March and said this month consumption and investment remain weak.
“The outlook now is more bearish than bullish,” Kim said on April 5 in his Seoul office. “It does not appear that the economy is going to pick up anytime soon. The economic condition seems to be actually worsening.”
Copper for delivery in three months was little changed at $7,577 a metric ton on the London Metal Exchange at 10:56 a.m. in Seoul today. Prices are down 4.4 percent this year.
Inventories of the metal monitored by the LME climbed to 587,925 tons on April 10, the highest level since October 2003, exchange figures showed. The LMEX Index of six metals lost about six percent this year.
South Korean demand for the six metals, including copper, aluminum and zinc, may slip about 5 percent in 2013 from 3.06 million tons in 2012, Kim said. The group’s members include Korea Zinc Co., LS-Nikko Copper Inc., Poongsan Corp. and steelmaker Posco.
“We had also expected overall metals demand would rise this year, but are now forecasting a contraction,” Kim said. “The economy was not good last year, which actually has run through early this year.” said Kim.
The Korean economy expanded 2 percent last year, the least since the global financial crisis. The finance ministry on March 28 cut its 2013 growth forecast to 2.3 percent from 3 percent in December, below the central bank’s 2.8 percent projection.