WRAPUP 1-Copper demand seen surviving China rate hikes

 * China demand seen remaining buoyant despite slowdown
 * Demand seen recovering in U.S., Europe
 * Copper ends firmer despite China rate hike
 By Alonso Soto and Melanie Burton
 SANTIAGO, April 5 (Reuters) - China's interest rate hikes
are fanning fears of a deeper slowdown in the world's top
copper consumer, but demand remains strong and is picking up in
the United States and Europe, industry executives say.
 The Chinese central bank raised rates on Tuesday for the
fourth time since October as it seeks to counter price
pressures, initially depressing prices, but copper ended firmer
as tight supply underpins the market. [ID:nLDE7340WO]
 "The fundamental demand is still there (China). The credit
situation in China, when that changes, has a short-term effect,
but the underlying growth story in demand is still there,"
Xstrata (XTA.L: Quote, Profile, Research) Copper Chief Executive Charlie Sartain said on
the sidelines of the CRU world copper conference in Santiago.
 "Internationally we see a recovery in other markets not as
significant as China," he added. "In markets such as the U.S.,
we see a recovery there."
 China's rate hike underscores its determination to clamp
down on inflation to keep the world's fastest growing major
economy on track.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> For full coverage, please click on:          [ID:nCESCOCRU]
> Graphic of China rates, CPI     http://r.reuters.com/veh88r
> Copper price, stocks graphic:   http://r.reuters.com/vyv78r
> Insider Freeport-McMoRan CEO    http://bit.ly/hzA1QQ
> Insider Chile Mining Minister   http://bit.ly/eCkxxv
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 Sartain expects demand for copper in the United States to
grow by around 6 percent, and sees signs of an emerging
recovery in Europe after the 2008 financial meltdown.
 The consensus among industry players is that demand in
China will remain buoyant as the world's No. 2 economy forges
ahead with infrastructure and urbanization projects.
 Copper (CMCU3: Quote, Profile, Research) prices surged 31 percent in 2010 and hit an
all-time high of $10,190 per tonne this February, before
easing.
 And with markets expecting a copper supply deficit of
444,000 tonnes in 2011, and a narrower 184,500 tonnes deficit
the following year, prices are expected to remain high.
 However, Miguel Angel Duran, CEO of Anglo American's
(AAL.L: Quote, Profile, Research) Chile arm, says copper deliveries to China have eased.
 "For now, it's something that needs monitoring, but I have
no reason to think it will be a worry in the long term," he
said.
 Some are concerned that rising stocks held by investors as
collateral in China, not immediately visible to the market,
could significantly shrink copper deficit projections.
 Others argue markets are obsessing about China -- and say
they would prefer slower but more sustainable economic growth
that would avoid price bubbles.
 But China still remains the No. 1 risk to demand for the
red metal.
 "In the near term, it has been and will continue for the
foreseeable future to be the performance of China," said
Richard Adkerson, CEO of U.S. miner Freeport-McMoRan Copper &
Gold Inc (FCX.N: Quote, Profile, Research).
 "Behind China is the global economy and rising oil prices
is one factor that affects the global economy. China today is
consuming 35 to 40 percent of the world's copper and providing
the growth in this industry."
 (Writing by Simon Gardner; Editing by Lisa
Shumaker)


WRAPUP 1-Copper demand seen surviving China rate hikes