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Copper Demand Will Grow at 4% for a Decade, Rio Says

April 9, 2008 at 18:59 by Mario

Rio Tinto Group, the world’s third- largest mining company, said global demand for copper will grow 4 percent a year for a decade or more led by sales to China.
“That 4 percent growth can be sustained for at least a decade or even a generation,” Vivek Tulpule, chief economist of London-based Rio, said today at a briefing in Melbourne. That’s above historical demand, he said. “It’s a very tight market.”
China’s 11.4 percent economic growth in 2007, the fastest in 13 years, fueled demand for copper and pushed prices to a record $8,820 a ton on the London Metal Exchange on March 6. It may increase imports of copper by 20 percent to a record this year, Trafigura Beheer BV, the nation’s top supplier, said today.
“In 2009, either early or late, there will be an almighty rush to restock copper and we could see quite extraordinary things happen to the price,” Tulpule said. He wouldn’t comment on specific prices. “It’s entirely possible we have not yet seen the top.”
Rio rose as much as A$2.80, or 2 percent, to A$140.20, and was at A$137.50 at 3:05 p.m. Sydney time on the Australian Stock Exchange. It has gained 3 percent this year compared to a 13 percent decline in the benchmark index.
Chinese imports of concentrate, or processed ore containing copper, may rise to 5.4 million metric tons from 4.5 million tons in 2007, Trafigura said today. China would become the world’s top buyer, surpassing Japan which bought 5.05 million tons last year.
The price of copper has gained 28 percent on the London Metal Exchange this year. It fell in London overnight, snapping a four- day advance, on speculation a U.S. economic slowdown will erode demand for metals.
“The slowdown in the U.S. economy is not expected to have an effect on commodity demand,” Tulpule said. “If the Chinese economy does slow, the government could spend money and take its foot off the brakes on spending.”

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