China's copper concentrate arrivals may increase by 60% month-on-month in March
China's copper smelters are facing a shortage of semi-processed materials, which has driven copper prices to rise sharply in the near future. However, with a large amount of supply from South America, this tension may be eased.
Daejin Lee, chief shipping analyst at IHS Markit, said that starting in March, as the bottleneck problem eases, a large number of ships will arrive at Chinese ports from Chile and Peru (main suppliers in China). He expects that the amount of concentrate arriving in China this month may increase by nearly 60% month-on-month.
In addition, according to Ed Meir, an analyst at Ed&F Man Capital Market, previously due to port congestion and logistics difficulties, supply may be very tight, and even Chile will fluctuate, but this situation may turn to easing and suppress the rise in copper prices.
An analyst from the research institute Beijing Antaike Information Co., Ltd. pointed out that the rebound in imports is in line with the expected growth after the Chinese New Year.
Analyst Meir also said that signs of increased stocks on exchanges are a bearish indicator for the market, although investors continue to buy copper in large quantities.
On February 17, the London Metal Exchange's copper stocks (calculated in tonnage) jumped to the highest level since November last year. At the same time, in the week ending February 19, the copper inventory tracked by the Shanghai Futures Exchange rose to its highest level in three months.
Previously, the market expected that the rebound in economic growth, driven by the government's commitment to investing in green infrastructure, would stimulate the deficit. Driven by low raw material inventories, high freight rates and logistics difficulties, the tightness of the concentrate market has pushed China's processing fees to multi-year lows and raised concerns that production cuts may further reduce metal supplies.
Chile, the world's largest copper producer , also announced its worst month since the epidemic lockdown on February 19. According to data from the Chilean National Bureau of Statistics, copper production in January fell by 8.3% month-on-month, the lowest level since February last year.
