China's Copper Market Needs More Stimulus - Eagle Metal

According to a large metal importer, China's demand for copper requires more economic stimulus to revive. The government has implemented a series of measures since the end of September to support confidence in the world's largest metal buyer, where a prolonged slowdown in the real estate market has hampered growth. Despite large proposed sums, copper prices have recently declined, partly due to concerns that financial support from Beijing will not materialize.

Among the latest promises from the Finance Ministry is $1.4 trillion to bail out heavily indebted local governments, but it has refrained from taking direct steps to unlock consumer spending that the market desires.

Ni Hongyan, the deputy general manager of Eagle Metal International Pte, registered in Singapore, stated in an interview yesterday at the company’s office in downtown Shanghai, “The recent stimulus is primarily to refinance local government debts, so it will not significantly increase physical demand.”

According to Antaike, demand in China will slow down and consumption will peak by the end of the decade. The state-backed researcher also believes that the slowing economy, along with efforts in clean energy industries to reduce the amount of copper in their products or find alternative materials, will have an impact.

Eagle Metal reportedly accounts for about 10% of China’s refined copper imports. Last year, the country’s total imports were 3.7 million tons. More than half of their customers are fabricators that shape the metal for manufacturers.

China's continuous increase in its own smelting capacity is hindering supply from overseas countries. The deputy general manager, Leah Li, indicated that this means the company will seek opportunities elsewhere, including Vietnam and South Korea, where copper demand from electric vehicles is expected to rise next year.