BEIJING: The first half of 2016 was a strong one for China’s copper imports, which are estimated to have reached a total 4,671kt, a rise of 22 percent year-on-year. In the first half of 2015, China had imported a total of 3,837kt copper metal.
Net imports of refined copper rose in June, whereas imports of scrap remained flat and concentrate imports dropped modestly. The solid imports data gives fundamental support to the recent rises in price in copper. However, there still remain the questions regarding the sustainability of record breaking. “We continue to see a market weaker in H2 16 as a result of a slowdown of momentum within the Chinese macroeconomy, and retain our call for prices to fall below current spot levels,” said Barclays in a research note.
Delving into details of June copper imports, net imports of refined copper rose 12 percent sequentially to 263kt. The increase in net imports in June from May’s total of 234kt was marketed by a drop in both exports and import, with the drop in exports outweighing that of the imports. On an annual basis, the net imports of refined copper rose 9 percent year-on-year. For the first half of 2016, net refined imports reached 1,874kt, rising 20 percent year-on-year from H1 2015’s 1,559kt.
Meanwhile, scrap imports remained flat in June, on a month-on-month basis. For the first half of 2016, the imports dropped 7.7 percent to 1,561kt from H1 2015’s 1692kt. Imports of copper concentrate dropped modestly by 6 percent month-on-month in June to 1,350kt.
Even if the June figure shows a drop of 100kt from May, the import represents a strong 37 percent year-on-year rise. The surge in concentrate imports into China is because of new mines stating production. Copper concentrates imports surged 82 percent year-on-year in the first half of 2016 from 6,020 in the first half of 2015.
The latest import data shows that copper consumption in China is likely to expand for another year, stimulating China’s share of global copper consumption to almost 50 percent of the global market, according to Barclays. However, the recent strength in copper imports to the nation has raised sustainability questions. The solid performance of copper imports has rebased market expectations higher, needing continuing solid import figures to maintain positive momentum of price.
