China’s refined copper exports more than doubled to 157,751 tons in June from May, as weak domestic demand prompted smelters to turn to overseas markets, data released by the customs authority revealed on Sunday (July 21).
The figures follow data last week that showed record-high exports of unwrought Copper and Copper products for the second month in a row in June.
“Chinese smelters have been largely sticking to their production plans and opted for exports,” as domestic demand is “very weak”, Fan Rui, an analyst at Guoyuan Futures Co told Bloomberg.
Copper stocks continue to rise: almost 230 thousand tons are now registered at the London Metal Exchange, 120% more than in May.
Copper prices dropped to their lowest in more than three months on Monday (July 22), hurt by demand worries, according to a Reuters report. Three-month copper on the London Metal Exchange eased 0.4% to $9,273.50 per metric ton by 0618 GMT. The contract hit as low as $9,264.50 earlier in the session, the lowest since April 8. The most-traded September copper contract on the Shanghai Futures Exchange fell 1.3% to 75,920 yuan ($10,438.61) a ton, after also hitting its lowest since April 8 earlier.
A key political meeting in China last week confirmed Beijing’s desire to refrain from massive stimulus disappointing investors. However, on Monday (July 22) China increased support for the economy with surprise interest-rate cuts.
The People’s Bank of China cut the five-year loan prime rate, which is a benchmark for mortgages, by 10 basis points to 3.85% from 3.95%. The one-year loan prime rate, or LPR, was reduced to 3.35% from 3.45%.
The measure is expected to indirectly support activity against a backdrop of economic slowdown.
ING economist Lynn Song forecasts at least one more rate cut in the coming months as China will have a more challenging second half if it is to maintain 5 percent growth for the full year.
