December 9th, 2011
03:28 AM GMT
(CNN) – If the Chinese economy is slowing down, why is the country buying so much copper?
China has posted a weaker economic growth of 9.1% in the third quarter, in line with the "soft landing" of the white-hot economy Beijing touts.
Also, China missed its expected oil consumption targets according to a report by Platts, an energy consultancy.
According to the report, the estimated oil demand for the third quarter of the year has been this year's lowest, at 8.99 million barrels a day. A decrease compared with 9.33 million during the first three months of this year.
"This is a little bit at odds with economic growth slowdown," Neumann said, "but probably has to do with a pickup in economic activity is the U.S."
Yet other signs point towards more growth, not a soft landing.
China is the world's largest buyer of iron ore and copper. Purchases of these minerals, "are consistent with a strong economic expansion," Mario Nigrinis, Principal Economist at BBVA Bank Hong Kong told CNN. He also noted that the government is concerned with bringing the economy to a soft landing, and the current growth below 10% also coincides with that policy.
Over half of shipper CCNI-Agunsa's business is shipping copper from the world's largest exporter, Chile, to China. While the reference price for this metal slid around 20% since the beginning of the year, the shipper still sees growth, said Sebastián Santa Cruz, director of CCNI-Agunsa in Hong Kong.
"Demand increases every month," Santa Cruz said. The company only handles containerized copper ore and has carried around a third of the million tons that crossed the Pacific Ocean this year from Latin America to China.
Growth in copper purchases by China grew at a 38% in the third quarter, while during the first half of the year the increase was of 15%, according to figures compiled by BBVA.
China's appetite for commodities like copper grows as manufacturers that use it to produce consumer goods increase their productions.
International institutions like the OECD predict that China's growth will slow down to 8.5% in 2012, but the country's so-called soft landing may well only be a short break in its breakneck growth.
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