China Jan-Feb copper imports fall on weak demand

China’s unwrought copper imports in the first two months of 2023 fell 9.3% from a year earlier, customs data showed on Tuesday, as higher global prices curbed buying appetite.

Arrivals of unwrought copper and products into China, the world’s biggest consumer of the red metal, were 879,000 tonnes in January and February, down from 969,289 tonnes in the same period a year earlier, according to the General Administration of Customs.

A surge in COVID-19 cases across the country after Beijing abruptly exited its zero-COVID policy in early December disrupted industrial activity, dampening copper demand.

The metal is widely used in the power, construction and transportation sectors.

Rising global prices also curtailed demand for imports in January and February, a period when the market is normally weak because of China’s week-long Lunar New Year holiday.

Three-month copper prices on the London Metal Exchange CMCU3 hit a seven-month high of $9,356 a tonne on Jan. 23, up 12% from the beginning of December.

The rally was driven by a brighter market outlook following China’s reopening and a series of policy support measures for the property sector and broader economy.

Although manufacturing activity was strong in February, copper imports did not pick up because end users had sufficient stocks to tap.

Subdued import appetite has driven down the imported copper premium SMM-CUYP-CN, which fell to an 11-month low of $21.50 a tonne on March 2, and was down 86% from its October peak of $152.50. However demand is expected to improve.

Imports of copper concentrate, or partially processed copper ore, came in at 4.64 million tonnes for the first two months of the year, up 11.7% on a year earlier and a record high for the period as smelters ramp up production for anticipated growth in copper demand.

“We are seeing copper demand picking up into March across most of the end-user sectors though largely seasonally,” said Lynn Zhao, a Shanghai-based commodity strategist at Macquarie.

Zhao expected full year refined copper demand in China to rise by around 3% in 2023, after the world’s second largest economy set a modest target for economic growth for this year.
Source: Reuters (Reporting by Siyi Liu and Dominique Patton; Editing by Tom Hogue, Christian Schmollinger and Sonali Paul)