(Bloomberg) — China’s copper smelters are preparing to boost exports, a sign its manufacturing and construction sectors aren’t yet making a decisive recovery from the ravages of the past year.
The possibility of a powerful rebound in Asia’s biggest economy has fueled a number of bullish calls on the industrial metal since China exited strict Covid curbs late last year. But an imminent burst of exports from the world’s biggest copper market suggests appetite for the bellwether metal among domestic buyers is still shaky.
At least four major smelters are planning to deliver 23,000 to 45,000 tons of refined copper in total to London Metal Exchange depots in Asia in coming weeks, according to people with knowledge of the sales, who asked not to be identified because the plans are private.
Global copper prices have retreated since reaching a seven-month high in January, partly due to uncertainty over the strength of China’s recovery. The growth target of about 5% for this year — unveiled by the country’s leadership over the weekend — was viewed as a modest goal that won’t deliver a major boost to commodities.
China is a big net importer of copper, but refined metal occasionally flows out in larger volumes when there’s imbalances with the global market. Inventories have been stacking up recently in China, while supply is much tighter elsewhere, and prices are relatively higher. Exchange stockpiles in the rest of the world fell to their lowest since 2005 last month.
“Chinese demand has been lower than expected but it will recover,” said Fan Rui, an analyst at Guoyuan Futures Co. The jump in copper exports could continue into April before Chinese demand eventually picks up, she said.
There are tentative signs that point to stronger metals demand in the country: for example, the nation’s manufacturing index for February notched its highest reading in more than a decade.
The Chinese copper smelters have no clear idea about future exports with the domestic outlook still uncertain for now, the people familiar with their plans said.
Some 13,000 tons of copper that appeared in warehouses in Busan, South Korea this month are from Chinese smelters, one of the people said. The fresh exports are likely to go to LME sheds in South Korea or other Asian locations, and the volumes are in addition to any contracted supplies, the people said.
Copper prices fell 0.7% to $8,850 on the LME as of 10:36 a.m. in Shanghai. They’re down around 1% this month but are still up almost 6% for the year.
The Week’s Diary
(All times Beijing unless noted.)
Thursday, March 9
China inflation data for February, 09:30
China to release February aggregate financing & money supply by March 15
Wilson Center webinar on geopolitics of minerals critical to the clean energy transition
Mysteel’s Indonesia Nickel Supply Chain Summit in Jakarta
On The Wire
China’s consumer inflation slowed sharply in February as costs of food and consumer goods eased following the end of the Lunar New Year holiday, while factory prices continued to decline.
The US should scrap decade-old import tariffs on solar power equipment after years of protectionism has failed to boost its domestic manufacturing base, according to the chairman of a top Chinese clean energy firm.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
