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How’s Chinese Copper Demand Looking in 2018?

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Nov. 20 2020, Updated 1:53 p.m. ET

Chinese copper demand

Since China, the world’s largest copper consumer, isn’t self-sufficient regarding copper assets, it needs to import copper. Analysts see China’s copper imports as an indicator of the country’s copper consumption. Copper mining is situated in Latin America. Chile is the largest mined copper producer. Companies like Freeport-McMoRan (FCX) and Southern Copper (SCCO) have plants in the region. In this part, we’ll discuss China’s February copper imports data to gauge the country’s copper demand dynamics.

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Copper imports

China imported 352,000 metric tons of unwrought copper in February. Although China’s imports fell on a month-over-month basis, they were higher on a yearly basis. Meanwhile, it’s important to look at the consolidated data for January and February due to China’s Lunar New Year holidays. In the first two months of 2018, China’s unwrought copper imports rose 10.4%—compared to the same period in 2017.

Along with unwrought copper (VALE), China also imports copper concentrates. In February, China imported 1.45 million metric tons of copper concentrates. While imports fell sharply on a sequential basis, they were similar to the same month in 2017. In the first two months of 2018, China’s copper concentrate imports were 3.0 million metric tons—a yearly rise of 14.5%.

Analysis

So far, China’s copper imports look strong in the year. Meanwhile, copper’s 2018 bullish theme is built around supply-side disruptions. Labor contracts at several copper mines, including at BHP Billiton’s (BHP) Escondida mine, are coming up for negotiation this year. Although some of the contracts were signed without an issue earlier this year, according to Mining.com, workers at Antofagasta’s (ANTO) Los Pelambres copper mine in Chile have voted for a strike “rejecting the company’s latest offer for a collective labor agreement.”

You can visit Market Realist’s Metals and Mining page for ongoing updates on the industry.

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