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Copper rally may hit roadblock as China imports decline-18th China(Guangzhou)Int¡¯l Non-Ferrous Metal£¨Copper£©Exhibition
12/7/2016 Copper exhibition -non-ferrous metals expo |
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Gulf Times reported that copper¡¯s searing rally in November could hit a roadblock as China¡¯s imports of the metal shrink. The world¡¯s biggest consumer is making more copper domestically than ever before, using supplies of foreign ore concentrate, which is curbing demand for the refined metal.
Overseas purchases of refined copper plunged to the lowest level in more than three years in October, contracting 45% from a year earlier, customs data showed on Friday. Shipments in the past four months are a quarter below the same period last year. Domestic smelters, meanwhile, boosted output by 8% to a record in the first 10 months as purchases of foreign concentrate expanded 31%.
According to Zhu Yi, an analyst with Bloomberg Intelligence in Hong Kong, ¡°Global mine supplies are ample and Chinese refiners are making good profits, so it makes sense for them to import more. The trend may continue for a while as long as margins stay favourable.¡±
Pan Pacific Copper Co, Japan¡¯s biggest producer, sees the threat of a steel-type glut for copper emerging in China as processing capacity expands, and says the key to mitigating that lies with how the government and existing smelters help newcomers understand the risks posed by rapid expansion to industry profitability.
The global market is adjusting to the change in trade patterns, which favours shippers of raw material to China over suppliers of metal. Future ore imports will depend on how much profit Chinese processors can reap from the treatment and refining fees they negotiate with suppliers.
While a surge in mine output earlier this year helped push up treatment fees to the highest since February 2015, the charges have since eased on signs that supply growth is slowing. Jiangxi Copper Co, China¡¯s top producer, had to agree to a 5% cut in fees for next year in a benchmark industry deal.
-18th China(Guangzhou)Int¡¯l
Non-Ferrous
Metal£¨Copper£©Exhibition
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