Chinese demand for copper scrap probably will be little changed this year as the nation imports refined metal to use in infrastructure projects, said the Bureau of International Recycling's local ambassador.

"The only thing pushing up China's GDP is domestic consumption," David Chiao, vice president at Atlanta-based recycler Uni-All Group Ltd., said yesterday in a phone interview. "Most of the consumption is infrastructure, and most of that requires primary grade" metal, or refined copper, rather than scrap.

State Grid Corp. of China said Feb. 8 it will spend 227.4 billion yuan ($33.3 billion) on its power network this year. The country's government will build 2.8 million housing units in 2010, the housing ministry said March 8.

Electrical equipment and construction are the two main uses of copper, according to the Copper Development Association.

"Demand will be a little bit stronger than in 2009 in the next few months," Chiao said, citing the resumption of activity at Chinese factories after last month's weeklong Lunar New Year holiday.

Imports of copper scrap fell 18 percent to 280,000 metric tons in February from the prior month as inbound shipments of refined metal climbed 10 percent, the Beijing-based customs office said today. Scrap imports slid 23 percent on the month in January, more than the 21 percent drop for refined metal.

From Premium to DiscountChinese buyers of high-grade copper scrap are offering between $200 and $250 a ton less than the price of futures traded on the London Metal Exchange, according to Chiao. That compares with a premium in 2008, when scrap became scarcer as the world recession spurred companies to cut back production and collections of used metal halted.

"The gap might narrow because there is not much volume available and supply is becoming very short," Chiao said. "The recession is not over yet, although it is getting a little bit better."

Uni-All on average shipped 150 containers a month of copper scrap, each holding between 20 and 25 tons of metal, to China from 2005 to 2008, according to Chiao. This year, as in 2009, it probably will average 70 to 80, he said.