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China’s Copper Import Data Could Provide a Lifeline to Bears

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China’s October trade data

Analysts see Chinese copper imports as an indicator of the country’s copper demand. Copper mining is concentrated in Latin America with Chile being the largest copper mining country (BHP) (AAL-L). China is the world’s largest copper importer. In this article, we’ll look at China’s October copper imports data.

Imports fall

China imported 330,000 metric tons of unwrought copper and copper products in October 2017 in contrast to 290,000 metric tons in the corresponding month last year. Although China’s unwrought copper imports rose on a yearly basis in October, they fell 23.2% as compared to September to their lowest level since April 2017.

China also imports copper concentrates that are processed in the country. Last month, China imported 1.4 million metric tons of copper ores and concentrates, which is almost the same as compared to October 2016. However, imports fell as compared to September.

Copper prices

Copper prices have been strong this year, and the LME (London Metals Exchange) three-month copper contract is trading a tad short of $7,000 per metric ton. However, copper has come off its 2017 highs and is still trading with year-to-date gains of 25.4%. Copper bulls have overshadowed bears for the last couple of months.

China’s dismal October copper imports could provide a lifeline to copper bears. It’s worth noting that copper came under selling pressure in September after China’s copper imports data disappointed markets. If copper prices react negatively to China’s October copper imports data, miners like Freeport-McMoRan (FCX), Glencore (GLEN-L), and Antofagasta (ANTO) could also come under pressure. However, we should read the month-over-month decline with caution, as there could be an element of seasonality in China’s trade data due to Golden Week holidays.

Meanwhile, several brokerages have revised their ratings on copper miners after their 3Q17 earnings release. You can read How Analysts Are Rating Copper Miners after Their 3Q17 Results to explore how analysts are rating leading copper miners.

You can also visit our Copper page for ongoing updates on this industry.

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