China’s appetite for copper – which accounts for nearly 40 per cent of global demand – appetite is closely watched by traders and economists. It provides a leading indicator of the strength of China’s industrial complex and construction sector, key drivers of global commodities demand from iron ore, to aluminium and cement.
May copper imports slid 36 per cent from the previous year to reach 254,738 tonnes. “It’s not a disastrous number, but it’s not a ravishingly bullish one either,” said David Thurtell, commodities strategist at Citi.
He added: “There’s no doubt in my mind that China’s copper consumption has slowed this year, whereas it was growing by 20 to 30 per cent last year.”
Analysts and traders say tightening credit conditions, an unclear picture of physical copper demand and warehouse destocking contributed to the limp copper purchases.
Copper prices were 0.3 per cent weaker at $9,025 a tonne in early London trade on Friday.
Feng Jie, a senior research at Xinhu Futures in Shanghai, said: “The growth in demand this year hasn’t been what we expected . . . Because of tight credit conditions the big purchases that we used to see from warehouses aren’t so common anymore.”
Stocks at bonded warehouses, where copper can be stored by traders before they pay import tax, have been falling this year—leading some analysts to believe that copper buying will soon pick up.
According to Barclays Capital, stocks at bonded warehouses fell to 350,000-400,000 tonnes at the beginning of June, from 600,000-700,000 in mid-March. Spot prices for physical copper in Shanghai are currently at a premium to the LME three-month copper contract, encouraging warehouses to sell down their stock. For the latest updates PRESS CTR + D or visit Stock Market news Today
No comments:
Post a Comment