Market and product

HAMBURG, Sept 15 (Reuters) - European demand for copperproducts is rising and a further increase in demand for newcopper is expected from China, Aurubis (NAFG.DE: Quote), Europe'sbiggest copper producer, said on Wednesday.

"The demand for copper products will continue to bereinforced by the positive economic trend in Europe and livelyexport business," it said in a market report.

"After the -- in some instances -- surprisingly high orderintake in the traditionally somewhat quieter summer season, thedemand for rod, shapes and strip products is now increasing."

China's imports of unwrought copper were strong in August,rising 10.7 percent on the month, Aurubis said. [ID:nTOE68903Y]

"Even higher import volumes are expected for September afterthe quieter summer," it said.

Chinese manufacturers were expected to intensify theircopper purchases after the summer, it said. These intentionswere already evident in the copper tube sector, whose productsare used in the manufacture of goods such as air conditioners.

"Chinese wire rod manufacturers are also expected to have anincreased demand for copper cathodes (new unprocessed metal) dueto their strong order intake," it said.

Overall, copper market participants will face a good levelof copper demand in the coming weeks and limited stockavailability, with inventories on a general downward trend onthe London, Shanghai and U.S. exchanges, it said.

"Given these fundamental conditions, it is difficult to findarguments that could send the copper price downward," it said.

Reports that China's Securities Regulatory Commission (SRC)was inspecting an investor in rubber futures had led to fears offurther inspections in the commodity sector, unsettling themarkets, it said. [ID:nSGE68C044]

"There were rumours that the SRB intended to sell its copperstock," it said. "Though neither of these unconfirmed reportscan be considered realistic, both led to short-term salespressure - a welcome opportunity for some market participants tostrengthen their purchasing positions."

"This shows that short-term price swings can be anticipatedin a general climate of insecurity but that there also exists acertain consensus on firm copper prices."

Meanwhile, spot copper treatment and refining charges(TC/RCs) in Europe had strengthened to around $30 a tonne and 3cents a pound, it said.

TC/RCs are fees paid to smelters by mines and traders torefine copper concentrate into new metal and are a critical partof the global copper industry's income.

The fees have been weak in recent months, touching singledigits in the summer, as mine output has been lower than smeltercapacity. [ID:nLDE65814E]

"Business in the spot market for copper concentrates hasbeen very calm in the past few weeks," Arubis said. "The largecopper smelters did not make any significant purchases,signalling that they are well supplied for the coming months."

This had contributed to strengthening TC/RCs, it said.

Meanwhile, current copper prices of over $7,000 a tonnemeant scrap metal supplies were good, it added.

Three-month copper on the London Metal Exchange CMCU3 wasat $7,590 a tonne at 0930 GMT on Wednesday.

(Source: Reuters, Reporting by Michael Hogan; Editing by Lin Noueihed)