China’s copper imports
China is the world’s largest copper consumer—it accounts for almost 45% of the global demand. However, the country isn’t self-sufficient regarding its copper needs. China is the world’s largest copper importer. Notably, copper’s dynamics are different from some of the other metals like steel and aluminum where China controls more than half of the global supply.
Imports fell in May
Copper ore and concentrate imports, which are processed in China, stood at 1.15 million metric tons in May. Imports have fallen on a yearly and monthly basis. In May, imports were at the lowest level since October 2015. According to Reuters, lower concentrate imports are due to limited concentrate supply. We should remember that miners including BHP Billiton (BHP) and Freeport-McMoRan (FCX) have faced labor issues this year, which impacted the copper supply.
China imported 390,000 metric tons of unwrought copper in May—down 9% year-over-year. However, imports rose 30% compared to April. The steep monthly increase in unwrought copper imports should be read with caution. In April, imports fell steeper than the previous month. Sagging copper imports raise doubts about Chinese copper demand. Notably, a slowdown in Chinese copper demand is negative for copper.
In the next part, we’ll look at various strategic alternatives for Freeport’s Indonesia operations.