LONDON, Sept 28 (Reuters) – The metals market used to treat China’s copper trade figures as a mirror on the world’s industrial growth engine. The more copper, particularly refined copper, China imported, the healthier the outlook for manufacturing activity and demand for all industrial metals.
That’s no longer the case. The copper mirror has been distorted over the years by stocking cycles, the complex flow of metal through China’s bonded warehouse zones, and an increase in the country’s own refining capacity.
There is still plenty of interesting information in the monthly copper trade data. It’s just that it tells us more about the state of the copper market than about the state of China.
CONCENTRATES IMPORTS SLOW BUT STILL GROWING
China’s increased smelting and refining capacity has seen its appetite for mined copper concentrates grow exponentially in recent years. Imports rose from 6.4 million tonnes (bulk weight) in 2011 to 17.0 million in 2016.
However, the pace of import growth has braked sharply from 28 percent last year to just 3 percent in the first eight months of this year. That reflects reduced availability of concentrates. The International Copper Study Group (ICSG) estimates that global mined copper output fell 2 percent in the first half of the year.
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