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Copper futures prices rebounded sharply on Monday on the back of a surge in Chinese imports of the metal widely used in industry and construction.
Copper for delivery in September trading in New York changed hands for $2.8850 a pound ($6,360 a tonne) in afternoon trade, snapping back 3.3% from a sharp drop on Friday.
In March, the bellwether metal briefly traded below $2.00, levels last seen during the global financial crisis of 2008-2009, but has now recovered by nearly 50%.
Customs data released on Friday showed China’s unwrought copper imports (anodes and cathodes) in July rose a stunning 81% from the same month last year to 762,211 tonnes and a full 16% above the previous monthly record set in June.
For the first seven months of 2020 imports are running at 21.7 million tonnes annualized, compared to 2019’s record-breaking tally of 22 million tonnes.
Over the first seven months of 2020, imports totalled 3.6m tonnes on track to easily beat 2018’s annual record of 5.3m tonnes.
July imports of copper concentrate rose by more than 12% from June’s 9-month low to 1.795m tonnes, but still down 13.5% from July last year, due to disruptions at mines in Peru, China’s top supplier.
He Tianyu, an analyst with CRU, told Reuters the record high was mainly due to the spread between London and Shanghai copper prices, which made it cheaper to buy metal from overseas, and purchases pushed back at the height of the coronavirus inside the country.
That arbitrage window has now shut and He cautioned that third-quarter copper demand may decline as feedback from consumers during a recent visit to Jiangsu province, a major smelting region, was that refined copper demand was “just so-so.”