China Sees Modest Increase in Copper Imports Due to Rising Domestic Demand

In a sign of recovering economic activity, China reported a 2.6% increase in its unwrought copper imports during January and February of 2024, as compared to the same period in the previous year. This uptick, as detailed by the General Administration of Customs, reflects an improvement in domestic demand for the metal, with the total imports reaching 902,000 metric tons, up from 879,000 tons.

The adjustment to China's import figures, which amalgamates data for the first two months of the year, aims to mitigate the distortion caused by the Lunar New Year holidays, a period when business activities traditionally slow down. This year's growth is particularly notable against the backdrop of the prior year when China was navigating the aftermath of lifting its pandemic restrictions.

According to He Tianyu, a copper analyst with CRU, the increase signifies a bolstered domestic demand compared to the subdued period following the pandemic's peak. However, the surge in imports is somewhat tempered by the country's high copper inventories and increased domestic production, which saw Shanghai Futures Exchange's monitored copper stocks reaching a one-year high recently.

Looking ahead, the demand for copper within China is anticipated to escalate from mid-March as production ramps up post-Lunar New Year festivities and prior to the summer's routine maintenance period. Nonetheless, this year's consumption growth may be dampened by the ongoing slowdown in the property market, a significant sector for copper usage, which also mirrors broader challenges within the world's second-largest economy.

In terms of copper concentrate, a raw material for refined copper production, imports saw a slight increase of 0.6%, totaling 4.66 million tons in the first two months—marking the highest level for this period historically. This is particularly relevant as China stands as the leading producer of refined copper, with its smelters expanding capacity in anticipation of the surging demand driven by the green energy transition, including sectors like electric vehicles and renewable energy.