China’s refined copper production
Previously in this series, we discussed how Chinese copper demand is progressing so far this year. In this part, we’ll look at China’s refined copper production in May.
China is the largest producer of refined copper in the world. China (FXI) accounts for over a third of global refined copper production. Chile (ECH) is the second-largest producer at the refinery level, and Japan is the third-largest.
Production increased by 6%
The previous chart shows the trend in China’s refined copper production, according to data released by the National Bureau of Statistics of China. In May, China produced 0.65 million tons of refined copper, a 6% YoY (year-over-year) increase. In April, production increased by ~4% YoY.
In the last four months of 2014, China’s refined copper production averaged more than 700,000 tons. This was a possible reason why copper inventory on the Shanghai Futures Exchange surged at that time.
Now, with production down compared with last year’s peak, copper inventories have also started to diminish in China.
A combination of higher production and declining copper inventory is a positive sign. It supports the view held by several analysts that Chinese copper demand could pick up in the second half of the year.
China is the largest refined copper producer, but it lacks copper mineral deposits. It has to import unprocessed copper ore and copper scrap. Analysts track the imports of these materials as an indicator of future refined copper production in China. In the next part of this series, we’ll discuss the latest trend in Chinese copper imports.