Terra Nostra Resources Corporation, majority owner of two China joint venture companies in the copper and stainless steel industries, today said that the recent price levels for copper, seen substantially as a result of demand for the metal out of China, help position the Company to show strong growth within its copper production business this year. The Copper spot price on the Shanghai Futures Exchange closed at 65,660 Yuan ($8,658) a metric ton last Friday, near previous high levels.
China's economy expanded 11.9% in the second quarter from a year earlier, the fastest pace in 12 years, fueling speculation that copper supply may lag behind demand growth in China -- the world's largest consumer of copper. In the first 4 months of 2007, world refined copper usage is estimated to have increased by 10.5% compared to the same period in 2006. Chinese apparent usage grew by 38% during the first 4 months of 2007 compared to the first 4 months of 2006 as net imports of refined copper rose by 270%.
China, the world's fastest growing major economy, has spurred a five-year rally in commodity prices. Last year the country consumed four million metric tons of copper, or about 22% of the world's production. That represents an increase from 10% of global consumption a decade ago, according to industry estimates. With forecasts for (China's) consumption of copper, aluminum and other building-block materials indicating a continuation of these levels, mining and metal companies are putting capital into new production. Recent figures for car output and housing construction rates provide further support for China's continued industrial growth.
According to industry analysts, the demand for copper, as commonly used in copper wiring for apartment buildings, copper air conditioning parts and copper automotive components, have turned China into the world's largest consumer of copper. Analysts also see rising demand in parts of Europe and the Middle East. Another part of the equation is supply, and over the last two to three years, the increase in supply has been lower than the market was expecting.
"The fact that these price levels are occurring during what is traditionally the slow season for copper consumption is a good sign for us," said Mr. George Chua, Chief Operating Officer of Terra Nostra, "particularly when combined with recent reports speculating these increases are largely due to persistent supply gap concerns in China. Our fourth quarter copper revenue rose 17% compared to the same quarter last year. We believe our growth is in part attributable to positioning our Company to benefit from the commodity super cycle."
China's economy expanded 11.9% in the second quarter from a year earlier, the fastest pace in 12 years, fueling speculation that copper supply may lag behind demand growth in China -- the world's largest consumer of copper. In the first 4 months of 2007, world refined copper usage is estimated to have increased by 10.5% compared to the same period in 2006. Chinese apparent usage grew by 38% during the first 4 months of 2007 compared to the first 4 months of 2006 as net imports of refined copper rose by 270%.
China, the world's fastest growing major economy, has spurred a five-year rally in commodity prices. Last year the country consumed four million metric tons of copper, or about 22% of the world's production. That represents an increase from 10% of global consumption a decade ago, according to industry estimates. With forecasts for (China's) consumption of copper, aluminum and other building-block materials indicating a continuation of these levels, mining and metal companies are putting capital into new production. Recent figures for car output and housing construction rates provide further support for China's continued industrial growth.
According to industry analysts, the demand for copper, as commonly used in copper wiring for apartment buildings, copper air conditioning parts and copper automotive components, have turned China into the world's largest consumer of copper. Analysts also see rising demand in parts of Europe and the Middle East. Another part of the equation is supply, and over the last two to three years, the increase in supply has been lower than the market was expecting.
"The fact that these price levels are occurring during what is traditionally the slow season for copper consumption is a good sign for us," said Mr. George Chua, Chief Operating Officer of Terra Nostra, "particularly when combined with recent reports speculating these increases are largely due to persistent supply gap concerns in China. Our fourth quarter copper revenue rose 17% compared to the same quarter last year. We believe our growth is in part attributable to positioning our Company to benefit from the commodity super cycle."
