For months, as copper spiked to record levels and then fell back down again, one key question has bubbled up across the metals industry: What is China’s state grid operator up to?
“It’s not a new topic in China but an ongoing one for years without significant progress from the state grid,” said Chenfei Wang, head of wire and cable at CRU Group in Shanghai. “The topic becomes ‘hot’ whenever copper prices rally.” Globally, substitution has reduced copper consumption by around 1 and 1.5% per year over the past decade, according to a recent presentation from the International Copper Association. — there is a widely held view that the industry is headed for large deficits in the coming years, which could drive prices dramatically higher.
The state grid’s insulated metallic power cable tenders slowed since April due to high copper prices, although some activity resumed after prices retreated, said CRU’s Wang.