Chinese copper imports raises to record as slump spurs demand
Bloomberg reported that copper imports by China rose to a record last year as a slump in prices in the second half of the year spurred demand and a fraud investigation at the port of Qingdao failed to halt use of the metal for financing.
According to data released by the General Administration of Customs, inbound shipments of unwrought copper and products rose 7.4% to 4.83 million tonne. Imports in December were at 420,000 tonne, unchanged from November.
Imports of copper ores and concentrates jumped to a record 11.81 million tonne in 2014, the customs data showed.
While imports fell for four consecutive months between May and August following the Qingdao probe, low offshore interest rates are maintaining demand for the metal's use in financing deals.
Shipments are poised to rise further this year as global mine supply increases and China's smelters raise processing fees, which are deducted from the price they pay miners for concentrate, or semi-processed copper ore. Chinese copper producers may boost capacity this year by 8% or 800,000 tonne, spurred by the higher charges.
Australia & New Zealand Banking Group Limited said that “With prices touching USD 6,000 a tonne, we would expect opportunistic buying to continue in the early part of 2015. Upcoming Chinese New Year holidays may delay that response in February.”
But according to Ms Li Chunlan, a metals researcher at CRU Group, long-term agreements signed by Chinese buyers propped up imports last year. Shipments may drop this year as that demand declines.
Mr Nic Brown, head of commodity research at Natixis SA, said that imports may also be impacted as the SRB takes 'substantially less' this year. The agency may buy 300,000 tonne this year, compared with as much as 700,000 tonne estimated in 2014.
Mr Rodrigo Toro, corporate sales vice president of Codelco, said that rising refined metal production by domestic smelters amid increasing global ore supplies could lead to lower imports by China in 2015.
Goldman Sachs Group Inc said that Global supply of copper ores and concentrates will outpace demand in 2015 by 492,000 tonne, up from a surplus of 353,000 tonne in 2014.
Source - Bloomberg