China’s demand slowdown
Imports of copper ores and concentrates in China were ~1.3 million metric tons in January 2017. That was 6.8% more than in January 2016. We should remember that copper concentrates are further processed in China.
In January 2017, China imported 380,000 metric tons of unwrought copper and copper products. That was a year-over-year fall of 13.6%. Imports also fell monthly. However, January imports data should be taken with a grain of salt since Chinese economic data could be somewhat distorted due to the Chinese New Year holidays. The Chinese New Year began on January 28, 2017. It started on February 8 in 2016.
According to a CNBC report, “Traders have said business has been slower than they expected even with the typical seasonal weakness.”
Like any other commodity, copper is driven by the underlying demand-supply dynamics. While the supply of copper has supported prices, copper also needs support from demand, especially in China.
In the next part of this series, we’ll look at some of China’s economic indicators to understand more about the country’s copper demand.