China’s copper imports in August dropped by 12.3% from the previous year, preliminary official Chinese customs data showed on Tuesday, September 10.
It’s yet another sign that the slowdown in Chinese economy is rippling out into the global economy.
Copper futures which hit an all-time record high of $5.106 per pound on May 21, 2024–closed today, September 12, at $4.13 a pound. Copper is still up about 4% for 2024. but the metal is down 19% from that May high.
Imports by the world’s largest copper consumer of unwrought copper and copper products came to 415,000 metric tons in August, down from the previous year’s 473,000 metric tons and dropping for the third consecutive month.
Earlier this month, Goldman Sachs slashed its 2025 price forecast by $4,900 to $10,100 per metric ton, citing China’s inventory buildup and continued weakness in the country’s real estate market. The benchmark three-month forward contract for copper had fallen to about $9,000 per metric ton by Tuesday, after hitting $11,000 in May.
“Copper demand in August and September are likely to be below the previous year levels” due to weak activity in the property sector, and some durable goods industries such as automobiles, Li Xuelian, senior analyst at the Marubeni Research Institute, told Japan’s Nikkei Asia. Li predicted that China’s copper imports this year will end up flat or slightly above the 2023 level. Cumulative import volume from January to August was up by 3% from the same period last year.
Looking ahead, S&P Global Commodity Insights foresees a potential rebound after high prices earlier this year also depressed demand, supporting the market to an extent. “Part of the delayed orders could be released in the remainder of the year and boost demand,” according to its analysts. Nevertheless, they expect only a minor increase from the high base of 2023.
Copper stocks are still up for 2024 on the rally to the May high, but they have started to give back those gains. Southern Copper (SCCO), for example is still up 15.50% for 2024 as of September 11 but the stock is down 9.40% in the last three months.
I like the long term copper story–rising global demand on green energy technologies and lagging increases to supply. I would look to add to positions new the end of 2024 on continued weakness from China’s economy.
I added Southern Copper to my long-term 50 Stocks Portfolio on December 12, 2017. The stock is up 114% since that pick. It pays a 3.48% dividend.
