Wednesday, 1 May 2019

China's metals imports robust despite macro doubts

LONDON (Reuters) - Industrial metal markets are taking a breather as they await tangible evidence that China’s latest stimulus package is feeding through to a flagging manufacturing sector. 

April’s purchasing managers indices, weaker than expected but still just in expansion territory, mean the collective guessing game continues.
More certain is the strength of the country’s imports in the first quarter of this year.
Copper imports almost matched last year’s record pace, while China continues to soak up refined zinc and lead to fill domestic market shortfalls.
Refined nickel imports have been slower than last year but inbound shipments of nickel raw materials continue to boom.
China’s exports of aluminium semi-manufactured products tend to grab the headlines but equally significant are shifts in the country’s trade in bauxite and alumina.
The tin trade picture is different, with China consolidating its position as a consistent net exporter even though imports of raw materials are falling. 
Refined copper imports slowed over February and March but the first-quarter total of 839,000 tonnes was down by only a marginal 1.6 percent on 2018, when imports hit a record 3.8 million tonnes.
Robust imports may in part just be the normal restocking as the country gears up after winter and the Lunar New Year holidays. Shanghai exchange stocks are mirroring this seasonal pattern, falling by 41,733 tonnes over the last month.
An extra element to the mix this year, however, might be the continuing disruption to scrap flows as Beijing steadily tightens the purity threshold for imports.
Scrap imports slumped by 32 percent last year and they fell another 38 percent to 343,000 tonnes in the first quarter of 2019.
The gross tonnage declines overstate the copper content impact as the quality of scrap shipments steadily rises but the continuing turmoil in this segment of the market is generating increased demand for both refined metal and mine concentrates.

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