Others News
- Copper exports fall in sign of U.S. weakness
Date: 5-Nov-2007 Sources: (Shenzhen Daily)
CHINA'S exports of copper tubes are down sharply and likely to stay weak through early next year in a sign that a slowdown in the United States is affecting shipments from the world's fastest-growing economy.
A credit squeeze in the United States, China's largest trade partner, has depressed the property sector and weakened demand for the tubes, mainly used to produce air conditioners, since September, industry officials said.
'Sales were about 20 to 30 percent lower than we had planned earlier this year. I don't think the trend will turn around in the short term,'said a salesman at Golden Dragon Precise Copper Tube Group, which accounts for the lion's share of China's copper tube exports.
'That reflects a slowdown in the U.S. property market. Actually our market share in the United States is still growing but the volume is much smaller than I expected.'
China's planners are anxiously watching whether a demand slowdown from across the Pacific could hurt growth - and employment - in China's export-dependent economy.
At the same time, they are tightening policy to curb inflation and cool red-hot asset prices. Shanghai shares have risen sixfold in two years, while property prices in cities including Shenzhen and Beijing are rising at a double-digit pace.
The anecdotal evidence from China chimes with Thursday's survey by the Arizona-based Institute for Supply Management (ISM). The ISM's index of U.S. imports dropped sharply to 47.5 in October from 53.0 in September, while exports jumped to 57.0 from 54.5 as a weak dollar made American goods more affordable overseas.
'China's exports to the United States account for about 10 percent of China's GDP, so (a slowdown in the United States) will for sure have some negative impact on China's export growth,'said Ha Jiming, chief economist at China International Capital Corp.
'The reason we haven't seen that yet is Chinese export orders we see now were booked months ago. In fact, China's export growth is already slowing, especially to the United States, but it's only edging down slightly.'
The drop in export demand for copper tubes, which account for about 80 percent of copper semis exports, has weakened spot demand for refined copper in eastern China, where most fabricators are located, and pushed physical prices to a discount to futures since mid-September.
The export slowdown may force Golden Dragon to hold off on its plans to expand facilities in eastern China, another official at the company said.
Some Chinese metals firms have already begun to address an expected downturn in prices, although most are still focused on the domestic economy, which is growing at more than 11 percent a year.
In August, China's largest steelmaker, Baoshan Iron and Steel Corp., cut prices of its major steel products for the fourth quarter, partly due to economic uncertainty caused by the global credit squeeze.
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