According to data released by China’s General Administration of Customs on November 9, 2015, China’s imports of copper and copper products for the first ten months of 2015 came in at 3.8 million tons. This is a fall of 4.2% when compared to the previous year’s data for the first ten months.
Because of this weak copper import data, LME (London Metal Exchange) copper fell to two-month low price levels on November 9, 2015, and is heading toward the six-year low price level it created in August 2015, as shown in above graph.
Import data increased demand concerns
The data demonstrates the fall in demand for copper in China, the second-largest economy in the world. Considering the fact that 45% of the world’s copper demand comes from China, any disappointing data regarding copper demand in the Chinese economy will impact copper and other base metal prices.
This recent imports data worsened the sentiment of base metals in the market and raised concerns regarding copper demand in China.
Recently the performances of copper and other base metals have been very disappointing due to the strength of the US dollar and the fall in global demand for copper. Recently released weak German industrial production data and strong US employment data kept the pressure on copper and other base metal prices.
Effects on companies and ETFs
Copper’s November 9 fall to two-month lows had its effect on all base metals, resulting in an overall fall. This also impacted major base metals mining companies such as Glencore (GLEN), Alcoa (AA), and Freeport-McMoRan (FCX).
The equity prices of major base metals miners tumbled on November 9, 2015. Base metal ETFs such as the PowerShares DB Base Metals ETF (DBB) and the SPDR S&P Metals & Mining ETF (XME) fell on November 9.