Chinese copper imports
China is the world’s biggest copper importer. Copper mining is concentrated in Latin America, and companies including Southern Copper (SCCO) and Antofagasta (ANTO) operate copper mines in the region. Analysts follow Chinese copper imports to get insight into the country’s copper demand. Copper, which is considered an indicator of the global economy, is languishing near the $6,000 per metric ton level after having topped $7,000 per metric ton earlier this year.
China imported 452,000 metric tons of unwrought copper in July 2018 as compared to 390,000 metric tons in July 2017. However, July copper imports were similar to June’s. China’s unwrought copper imports have been more than 450,000 metric tons for three consecutive months.
China also imports copper ore and concentrates, which are further processed in the country. Last month, China imported 1.85 million metric tons of copper concentrates, which represents a yearly rise of almost 32%. China’s copper concentrate imports surged to an all-time high in July.
While the data looks encouraging, we need to take it with a grain of salt. Higher copper concentrate imports could also be attributed to the closure of Vedanta’s smelter in India, which could mean that some of the India-bound copper concentrates might have landed in China. We should also remember that China’s copper scrap imports have been affected by the country’s drive against pollution. Higher concentrate imports could also be due to lower scrap imports.
Meanwhile, despite record Chinese imports and expectations of a supply disruption at BHP Billiton-operated (BHP) Escondida, copper prices and copper miners have sagged over the last month.
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