Last year, China imported almost a million tonnes of copper units in concentrate and other forms, and refined copper stocks increased by more than 200,000 tonnes. Any change in economic activity in the country, for better or worse, will therefore have a substantive impact on world copper markets, says Brook Hunt & Associates of the United Kingdom in a 2-volume study.
China’s physical and financial resources have become overstretched and inflation is likely to average about 40% annually in the first quarter of this year, all of which is leading to urban unrest, panic buying in cities and a financial crisis. The study suggests the central bank will be forced to take draconian measures to replenish foreign exchange reserves, rebuild liquidity at commercial banks and reduce inflation.
All these factors point to the country’s history of boom-and-bust cycles being repeated, with a recession almost bound to occur in 1995-96, says the study. The result will likely be lower total copper imports. The study shows why China’s dependence on imported refined metal will decline during the rest of the 1990s while its dependence on imported concentrates will increase. For more information about the study, China in the next decade: an analysis of China’s economy and copper industry with forecasts to 2005, write to Brook Hunt & Associates, Woburn House, 45 High St., Addlestone, Surrey, England, KT15 1TU.
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