Industrial Metals: China imported little copper and iron ore in June
by David Fleschen
The import data on various commodities published by China last Friday may at first glance indicate that the US trade dispute is affecting trade in goods. At second glance and after the surprisingly good economic data from the beginning of the week, however, there are other factors that explain the lower imports of copper and iron ore. According to Customs, China imported only 326 thousand tons of copper and only 1.47 million tons of copper ore and concentrate in June. This was 28% or 17% less than in the previous year.
The Chinese copper consumers seem to have continued to use stocks, as can be seen in the continued reduction of stocks at the SHFE. The low prices in June - copper temporarily hit below $ 5,800 per tonne - along with continued meltdown and processing charges, in turn, caused melt margins to shrink, causing them to process and consume less ore and concentrate. Iron ore imports fell 10% yoy in June, marking the lowest level since February 2016, at only 75.2 million tonnes. This is likely to be related to the sharp rise in prices for months.
In addition, Australia and Brazil, China's main suppliers, have been struggling with production problems for months, so fewer iron ore has been shipped from these two countries. Therefore, the Chinese steel producers had to resort to stocks. The high prices are also making the extraction of the more expensive and poorer quality iron ore in China more attractive.
Source: Commerzbank Research, Photo: Fotolia