China’s copper smelters are preparing to boost exports, a sign its manufacturing and construction sectors aren’t yet making a decisive recovery from the ravages of the past year.
The possibility of a powerful rebound in Asia’s biggest economy has fueled a number of bullish calls on the industrial metal since China exited strict Covid curbs late last year. But an imminent burst of exports from the world’s biggest copper market suggests appetite for the bellwether metal among domestic buyers is still shaky.
At least four major smelters are planning to deliver 23,000 to 45,000 tons of refined copper in total to London Metal Exchange depots in Asia in coming weeks, according to people with knowledge of the sales, who asked not to be identified because the plans are private.
Global copper prices have retreated since reaching a seven-month high in January, partly due to uncertainty over the strength of China’s recovery. The growth target of about 5% for this year — unveiled by the country’s leadership over the weekend — was viewed as a modest goal that won’t deliver a major boost to commodities.
China is a big net importer of copper, but refined metal occasionally flows out in larger volumes when there’s imbalances with the global market. Inventories have been stacking up recently in China, while supply is much tighter elsewhere, and prices are relatively higher. Exchange stockpiles in the rest of the world fell to their lowest since 2005 last month.
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