Citigroup cuts copper forecast on tariffs risk, China outlook
The bank has cut its short-term outlook for copper prices by 11% to $8,500 a ton over the next three months.
Chinese purchases of Russian coal slumped in the first two months of the year, after Beijing reimposed import taxes that make Russian supplies less competitive.
While China’s total coal imports over January and February surged 23% year-on-year to 74.5 million tons, Russia’s sales fell 22% to 11.5 million tons, according to the latest customs data. Import levies were restored at the start of the year, although other major suppliers like Indonesia and Australia aren’t affected due to free-trade agreements with Beijing.
The tariffs were removed in May 2022 to guard against supply risks after Moscow’s invasion of Ukraine roiled global energy markets. That helped pave the way for record imports last year, which included an increased portion of Russian coal shunned by other buyers. Now, policy has shifted to protecting China’s mining companies from the consequences of a glut after domestic output also rose to an all-time high.
Russia is still China’s No. 2 supplier after Indonesia, but the threat of trade actions could start to affect its eastward flows.
The US put sanctions on Russian coal exporters including Suek JSC, the nation’s biggest producer of the fuel, and Mechel PJSC in February. That’s curbing interest from buyers in China, worried about being hit by punishments that could involved restricting their access to shipping or banking services.
“Russian imports may stay at current levels, given the political uncertainties,” Feng Huamin, an analyst at the China Coal Transportation and Distribution Association, said at a media briefing on Wednesday.
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