HAMBURG, April 14 (Reuters) - Copper prices are likely to hold steady around current high levels although demand recovery could help further firm prices, Aurubis, Europe's biggest copper smelter, said on Wednesday.
Financial investment had been a key factor in current general copper price strength coupled with dynamic growth in Chinese copper demand and expected further recovery in world demand, the company said in a market report.
'These longer-term fundamental assumptions have already been included in the current price level,' Aurubis said. 'A further rise without new significant events therefore appears less likely and a strong drop equally unlikely.
'Price fluctuations should however remain a daily occurrence.'
Copper prices gained 140 percent last year and are up about 8 percent so far this year, driven by Chinese and investment fund buying, improving macro data and a weaker dollar.
Aurubis said China's copper imports were 'surprisingly high' in March, with good demand reported from a wide range of Chinese copper consuming industries.
The number of new cars sold in China achieved first quarter growth of 76 percent, it said.
'European carmakers can only dream of such growth, but the mood is brightening if only on the basis of a significant rise in exports,' Aurubis said, adding that a general recovery but no dramatic upswing was being seen in Europe's economy.
'Copper is nevertheless still in demand in Europe, since there are hardly any cathode inventories and the second quarter in the processing industry is showing top production intensity (with) very few public holidays, no vacations.'
It added: 'The copper product business has benefited from the economic recovery and is still characterised by strong demand.'
Rotterdam cathode premiums were currently at about $80 - $90 a tonne, it said. This was up from $40 to $60 in early March.
'This all still speaks in favour of firm prices, initially until the summer,' it said.
Copper concentrates on the spot market were still in short supply, with low copper ore treatment and refining charges (TC/RCs), it said.
TC/RCs are fees paid by mines and other concentrate owners to copper smelters to refine ore into metal and are a key part of copper refiners' income.
Demand from Chinese buyers in the European copper scrap market remains relatively low although Chinese copper scrap imports have risen by 34 percent in the first quarter compared with the prior year.
Tighter Chinese import regulations may continue to restrain Chinese scrap buying in Europe, it said.
(Reporting by Michael Hogan; editing by James Jukwey) Keywords: COPPER MARKET /AURUBIS (michael.j.hogan@thomsonreuters.com Reuters messaging: michael.hogan.reuters.com@reuters.net +49 40 419 03 4275) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Financial investment had been a key factor in current general copper price strength coupled with dynamic growth in Chinese copper demand and expected further recovery in world demand, the company said in a market report.
'These longer-term fundamental assumptions have already been included in the current price level,' Aurubis said. 'A further rise without new significant events therefore appears less likely and a strong drop equally unlikely.
'Price fluctuations should however remain a daily occurrence.'
Copper prices gained 140 percent last year and are up about 8 percent so far this year, driven by Chinese and investment fund buying, improving macro data and a weaker dollar.
Aurubis said China's copper imports were 'surprisingly high' in March, with good demand reported from a wide range of Chinese copper consuming industries.
The number of new cars sold in China achieved first quarter growth of 76 percent, it said.
'European carmakers can only dream of such growth, but the mood is brightening if only on the basis of a significant rise in exports,' Aurubis said, adding that a general recovery but no dramatic upswing was being seen in Europe's economy.
'Copper is nevertheless still in demand in Europe, since there are hardly any cathode inventories and the second quarter in the processing industry is showing top production intensity (with) very few public holidays, no vacations.'
It added: 'The copper product business has benefited from the economic recovery and is still characterised by strong demand.'
Rotterdam cathode premiums were currently at about $80 - $90 a tonne, it said. This was up from $40 to $60 in early March.
'This all still speaks in favour of firm prices, initially until the summer,' it said.
Copper concentrates on the spot market were still in short supply, with low copper ore treatment and refining charges (TC/RCs), it said.
TC/RCs are fees paid by mines and other concentrate owners to copper smelters to refine ore into metal and are a key part of copper refiners' income.
Demand from Chinese buyers in the European copper scrap market remains relatively low although Chinese copper scrap imports have risen by 34 percent in the first quarter compared with the prior year.
Tighter Chinese import regulations may continue to restrain Chinese scrap buying in Europe, it said.
(Reporting by Michael Hogan; editing by James Jukwey) Keywords: COPPER MARKET /AURUBIS (michael.j.hogan@thomsonreuters.com Reuters messaging: michael.hogan.reuters.com@reuters.net +49 40 419 03 4275) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.