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.
Inbound shipments of unwrought copper and products rose 7.4 percent to 4.83 million metric tons, according to data released by the General Administration of Customs today. Imports in December were at 420,000 tons, unchanged from November.
Copper, used in everything from electric wires to cars, fell 14 percent in London in 2014, the most in three years, as raw-material prices slumped on speculation supply growth is outpacing consumption. The metal on the London Metal Exchange fell as much as 1.5 percent after dropping below $6,000 a ton for the first time in more than five years yesterday.
“With prices touching $6,000 a metric ton, we would expect opportunistic buying to continue in the early part of 2015,” Australia & New Zealand Banking Group Ltd. said in an e-mailed report today. “Upcoming Chinese New Year holidays may delay that response in February.”
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, ANZ said Dec. 22. Long-term agreements signed by Chinese buyers propped up imports last year, according to Li Chunlan, a metals researcher at CRU Group. Shipments may drop this year as that demand declines, she said.
Rising Production
Imports may also be impacted as the SRB takes “substantially less” this year, Nic Brown, head of commodity research at Natixis SA, said last week. The agency may buy 300,000 tons this year, compared with as much as 700,000 tons estimated in 2014, Brown said.
Rising refined metal production by domestic smelters amid increasing global ore supplies could lead to lower imports by China in 2015, Rodrigo Toro, corporate sales vice president of Codelco, said on Nov. 21. Global supply of copper ores and concentrates will outpace demand in 2015 by 492,000 tons, up from a surplus of 353,000 tons in 2014, Goldman Sachs Group Inc. said in a Nov. 17 report.
Imports of copper ores and concentrates jumped to a record 11.81 million tons in 2014, the customs data showed. 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 percent, or 800,000 tons, spurred by the higher charges, according to Bloomberg Intelligence.
Copper for delivery in three months on the LME fell 1.3 percent to $5,937 a ton at 4:06 p.m. in Shanghai after earlier touching $5,928.25, the lowest since October 2009. The price is down 5.6 percent this year.