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Copper Prices Rally to Near-Record Highs Amid Stronger-Than-Expected Chinese Imports

Strategic Insights

— 2 min read

Copper prices soared to near-record highs on Monday after data showed Chinese imports of the industrial metal surged. The gains came on the back of stronger-than-expected import data from China, which has been the world's largest copper consumer, accounting for more than 40% of global annual consumption. The data revealed that copper imports in China touched a four-month high in January, leading to a renewed confidence in the metal's near-term price prospects.

Key Takeaways:

  • Copper prices rallied to near-record highs after China's copper imports surged to a four-month high in January.
  • Chinese imports of copper, copper alloy, and semifinished products increased by 5.7% from December and by 25% from the same month a year earlier.
  • The gains came on the back of stronger-than-expected import data from China, which accounts for more than 40% of global annual copper consumption.
  • The data also boosted copper prices in Europe and Asia, with the London Metal Exchange copper up 1.5% at $10,106.25 a metric ton.
  • Traders and analysts warned against pinning too much importance on the figures, citing the rush to import copper before the Lunar New Year holiday.
  • A sustained move higher in copper prices will depend on a drawdown in exchange stockpiles, which are currently rising.
  • Copper inventories in LME-listed warehouses rose 5,050 metric tons to 401,775 tons on Monday, up 15% since Dec. 10.
  • The price of tin, another industrial metal traded on the London Metal Exchange, hit a fresh record of $32,350 a metric ton, as speculators continued to flock to the metal on the basis of its strong supply-demand outlook.

Statistics:

  • Copper imports in China increased by 5.7% from December and by 25% from the same month a year earlier.
  • The London Metal Exchange copper was up 1.5% at $10,106.25 a metric ton.
  • Shanghai Futures Exchange copper rose 0.1%.
  • Copper inventories in LME-listed warehouses rose 5,050 metric tons to 401,775 tons.
  • The price of tin hit a fresh record of $32,350 a metric ton.
  • The first ever exchange-traded fund for physical tin, launched by ETF Securities in December, has seen holdings more than double to 405 tons from 180 tons at the end of January.

Sources:

  • Dow Jones Commodities News via Comtex (02/14/2011)
  • Barclays Capital (quote from Gayle Berry)
  • VTB Capital (quote from Andrey Kryuchenkov)
  • London Metal Exchange
  • Shanghai Futures Exchange
  • ETF Securities

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