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LONDON: China’s imports of refined copper fell to a four-year low in the first six months of 2023, underlining the sense of stalled momentum in the world’s manufacturing powerhouse.

The country is the world’s largest buyer of refined copper and its loss of import appetite has dashed hopes for a turbo-charged rebound from last year’s stringent COVID-19 restrictions.

The copper market, like those for many other industrial metals, is now awaiting more government stimulus, hoping a boost to domestic demand can compensate for weak export markets. China’s visible copper stocks are low, meaning that any significant shift in demand impetus could quickly reinvigorate imports.

However, the continued strength of copper raw material imports is translating into record domestic refined metal production, a structural shift towards self-sufficiency that is likely to dampen demand for imported units going forwards.

China imported 1.65 million metric tons of refined copper in the first half of 2023, down by 12% on the first half of last year and the lowest first-half tally since 2019. Even at that, the headline figure flatters to deceive slightly since this year’s imports included 48,000 metric tons of Chinese copper, likely metal that was sitting in a bonded warehouse waiting for exports to be redirected back to the mainland market.

China’s huge copper imports are offset against a smaller outbound flow of metal mostly produced under raw materials tolling contracts. The net import figure is the best indicator of the country’s pull on units from the rest of the world and on this basis imports were weaker still, dropping by 13% year-on-year to 1.48 million metric tons.

Two absences are worth noting. There has been no import surge from either Russia or the Democratic Republic of Congo. While China has soaked up surplus Russian aluminium shunned by Western users, there has been no change of copper import pattern since Moscow’s February 2022 invasion of Ukraine. China’s imports of refined copper from Russia fell by 20% in 2022 and they dropped another 10% year-on-year to 137,000 metric tons in the first half of this year. Imports of Congolese copper rose by a modest 4% to 366,000 metric tons in January-June with no sign of extra flows from the stockpile accumulated by China’s CMOC Group during an eight-month export ban. The company said it began shipping metal again in late April after the stand-off with the government over mineral royalties was resolved. Given the company produced 254,000 metric tons of refined copper at its Tenke Fungurume operations last year, there could be a lot of metal on its way to China in the coming months.

While China’s refined copper appetite waned in the first half of the year, its imports of mined concentrates continued to accelerate. May imports of 2.6 million metric tons marked an all-time monthly high and first-half imports of 13.4 million were also a new record.

China absorbed almost 950,000 metric tons more concentrate in the first six months of this year than it did in the same period of 2022. Imports of scrap copper, meanwhile, rose by 10% to 973,000 metric tons in the first half of the year.

Scrap shipments are still recovering from 2020, when Beijing was planning a total ban on what it termed “foreign garbage”. The government backtracked in the face of intense industry lobbying to allow higher-grade “recyclable resources” to enter the country. Imports have been trending higher ever since, particularly from traditional trading partners in Europe and the United States. It is worth bearing in mind that the copper content of what enters China is now much higher than was the case before 2020, making recyclable metal an increasingly important component of the country’s copper import mix.

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