Categories:
Base Metals
/
General Market Commentary
Topics:
General Base Metals
/
General Market Commentary
Metal traders head to Shanghai for copper conference amid trade war fears
SHANGHAI (Reuters) - Metals traders are arriving in Shanghai for the annual Asia Copper Week event, gathering in China at a time when the outlook for demand in the world’s biggest consumer of the commodity is clouded by the Sino-U.S. trade war.
Prices for copper, widely used in wiring and construction, have fallen around 17 percent in 2018 amid fears the trade spat will undermine demand for industrial metals. They are set for their worst year since 2015, snapping a two-year revival.
“Asia Copper Week will be an important event this year as the copper industry faces a number of challenges,” said Vanessa Davidson, director of copper research and strategy at CRU, citing Chinese restrictions on scrap imports and the need for mine investment.
China this year tightened thresholds on impurities in scrap metal imports and slapped a 25-percent tariff on scrap material from the United States, one of its top suppliers, in August.
China’s imports of unwrought copper and copper concentrate both fell by 18.7 percent month-on-month in October, albeit from bumper September volumes.
A copper fabricator in southern China, who supplies tubes to white goods manufacturers, said orders for his products had dropped sharply over the last two months.
“Our expectations for next year are not too good either,” the fabricator said, declining to be identified as he was not authorised to speak with media.
However, two China-based traders said they had seen strong physical buying of copper despite the anticipated headwinds.
“The macro data aren’t great but some traders are buying copper aggressively,” one said. China’s GDP grew at its slowest pace since 2009 in the third quarter.