Lower copper imports
China (FXI) is the world’s biggest copper importer. Copper mining is concentrated in Latin America, and companies including Freeport-McMoRan (FCX), Antofagasta (ANTO), and BHP Billiton (BHP) operate copper mines in the region. Copper prices are seen as an indicator of global economic activity (ACWI). Copper has come under pressure this year amid the US-China trade war scare. The red metal, which topped the $7,000 per metric ton level in June, is now languishing below $6,000 per metric ton. In this article, we’ll look at China’s August copper imports data. The country’s copper imports are seen as a leading indicator of its copper demand.
Imports fell on a monthly basis
China imported 420,000 metric tons of unwrought copper in August 2018 as compared to 390,000 metric tons in August 2017. While imports rose on a yearly basis, they fell on a monthly basis to their lowest level since February. If we exclude February, where the country’s trade activity was lower owing to the Lunar New Year holidays, last month’s unwrought copper imports were the lowest since October 2017. However, in the first eight months of 2018, imports are up 15.1% as compared to the corresponding period last year. China’s copper ore and concentrate imports also fell to 1.66 million metric tons in August. Imports reached a record high of 1.85 million metric tons in July.
Investors shouldn’t draw conclusions about the Chinese economy based on one month of copper import data. The data should be read in conjunction with some of the other recent economic data including retail sales, fixed asset investment, and car sales, which also points to some softness in the world’s second-largest economy.
Meanwhile, China is also taking measures to boost its economy. Read China Pulls Out Its Arsenal, Trade Spat Hurts Growth to learn more.