CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Due to its widespread use in construction, communication and transport copper is a bellwether for the global metals industry.
The red metal is having a bad 48 hours. It is now down more than 3% since Chinese metal traders and investors returned from a long weekend.
Like all industrial metals copper’s fortunes are being driven by Chinese consumption. In lunchtime trade on Thursday at was changing hand for $3.73 a pound, down more than 3% from $3.85 a pound on Tuesday. Today’s price is also an almost 20% drop from highs hit last year.
The recent slide is being driven by news that China is getting rid of its excess inventory.
Jiangxi Copper, China’s largest copper producer and smelter, is gearing up to export large quantities of the metal and bonded warehouses in Shanghai are re-exporting some of the 600,000 tonnes held there.
Including ‘strategic’ government reserves, China is estimated to have as much as 3 million tonnes of refined copper stockpiled – 40% more than just six months ago.
These figures are in stark contrast to copper inventories in the rest of the world which have fallen to multi-year lows of 240,000 tonnes.
That’s led some to conclude that the country has managed to corner the market.
2 Comments
Gary
Can anyone interpret that graph for me?
commoditiescritic
umm… China’s share of global metal consumption for Cu, Al, Zn, Ni and Pb for three years 2000, 2010 and 2020. Not a whole lot to say about it than the fact that China is expected to become an even more dominant metals consumer in the future.