Column: China’s commodity import trend driven by prices, not economy
China's imports of major commodities are often viewed through the prism of the performance of, and outlook for, the world's second-biggest economy.
China’s copper consumption levels are set to fall for the first time since 2008 on the country’s easing growth and the resulting tepid demand for commodities.
Bloomberg reports that analysts from commodities consultancy Weybridge expect consumption to fall 8.5% to 5.6 million metric tons in 2012 before rebounding 5.6% in 2013.
Weybridge CEO Simon Hunt says the Chinese economy’s slowdown and the attendant decline in demand for commodities will impact prices for base metals as well as harm the profits of miners.
Hunt is heavily bearish on China’s short-term economic prospects, observing that the country currently confronts ailing export markets overseas and excess capacity at home. According to Hunt “there are no signals of a recovery in heavy industry and manufacturing.”
China’s copper reserves have also reached prodigious levels following a major uptick in imports of the red metal during the first eight months of year. China imported 2.39 million tonnes of refined metal during the first eight months of 2012 compared to 1.51 million tonnes for the same period in 2011, and total reserves are currently estimated at 3.5 million tonnes.
Prices for copper futures remained steady in Tuesday trading, with the decision announced by the Chinese central bank to boost liquidity offset by sharp gains in the dollar against the euro.
