Imports of copper concentrate in China decrease by 18% in May compared to the record-breaking April figure.
Copper Imports Dip Yet Still Flourish in China
China's copper concentrate imports took a dip in May, diving 18% from the record-breaking 2.98 million tons in April, settling at 2.4 million tons[2][3]. Yet, these imports still managed to surge by 5.8% compared to May of the previous year, stirring a year-to-date rise of 7.4%[3].
A Beijing-based analyst from a futures firm wasn't entirely taken aback by this drop, given the record-breaking May imports. The decline's magnitude, however, was more than anticipated, as smelters continued their production unabated[3].
The market has been gripped by a copper shortage in ores, causing treatment charges (TCs) to remain negative for several months. Typically, smelters pay to process ore, potentially impacting import decisions[4][5].
Interestingly, the availability of additional ore from sources such as PT Freeport Indonesia, thanks to export approvals in March, could've engendered more stockpiling in April, subsequently reducing the need for imports in May[5].
Moreover, even with decreased imports, smelters have maintained output due to higher prices of by-products like sulphuric acid. These elevated prices aid in offsetting negative TC/RCs, easing the pressure to import more concentrate[3].
Despite the monthly decline, unwrought copper and copper product imports into China, a leading copper and aluminum consumer, slipped by 16.9% and 2.5% on year and month respectively, landing at 427,000 tons[3].
In contrast, China exported 547,000 tonnes of unwrought aluminium and aluminium products, inching up 5.6% on month but decreasing 3.2% on year[3]. Year-to-date volume fell 5.1% to 2.43 million tonnes[3]. These imports and exports consist of copper anodes, refined copper, alloys, and semi-finished products[3].
The index of copper concentrate imports in China's industry experienced a drop in May, but still showed an annual incline, suggesting a resilient market. Financing decisions for smelters might have been eased by the higher prices of energy by-products like sulphuric acid, reducing the need for increased concentrate imports.
