Status and Prospect of Copper Products Trade in 2012-Part I

According to statistics from the General Administration of Customs of the PRC, the imports of China's non-ferrous metal products (excluding chemical and Ferroalloy products) totaled $113.988 billion in 2012, a year-on-year decline of 1.59%. The export totaled $70.556 billion, a year-on-year increase of 34.10%. The trade deficit was $43.432 billion in 2012, a year-on-year decline of $ 19.781 billion (or 31.29%).

Among them, the imports of 87 kinds of copper products reached $71.926 billion, a year-onyear increase of 3.14%. The exports of them reached $7.193 billion, a year-on-year increase of 6.64%. The foreign trade deficit was $64.733 billion, a year-on-year increase of 2.68%(or $1.687 billion). Imports, exports and foreign trade deficit accounted for63.11%、l0.19% and l49.04% respectively of the total non-ferrous metal products trade.

Compared with the previous year, the share of copper product imports and foreign trade deficit in non-ferrous metal products rose by 2.9% and 49.3% respectively; the share of exports fell by 2.6%. Relevant data showed that imports of copper products accounted for 63% of the foreign trade of non-ferrous metal products. Meanwhile, the foreign trade deficit of copper products has far exceeded that of all nonferrous metal products. In addition, the gap between imports and exports of copper products has always been the largest among all nonferrous metal products.

On the whole, in terms of the foreign trade of copper products in 2012, imports of raw materials and metal imports and exports showed a growth trend: the imports and exports of most copper products, including copper materials and copper goods, showed a certain level of decline, but the decline in exports are less than that in imports. Throughout the year, apart from the import and export of copper, imports of raw materials and imports and exports of copper goods in the second half of the year were notably larger than those in the first half of the year. Meanwhile, the foreign trade deficit of copper products decreased in the order of copper materials, copper metal, copper and copper materials and copper goods.

In terms of imports, copper and copper materials still showed a year-on-year growth in 2012 and their share in imports of copper products continues to increase. Imports of copper materials accounted for the largest share of 50.86%, a decrease of 0.7% over the previous year. The share of copper imports increased by 2.5% to 38.60%. The share of copper material imports fell by 1.8% to 9.43%. Copper goods accounted for 0.88% of imports, a slight decline of 0.3% over the previous year.

In the export of copper products, copper materials are the largest in term of export amount. In 2012, copper materials accounted for 58.73% of the total exports of copper products, a decrease of 8.4% over the previous year. The share of copper exports continued to rise by 9.6% last year to 31.75%. The share of copper goods exports continued to fall by 2.3% to 8.36%.

In terms of foreign trade deficit, copper raw materials continued to rank first. In 2012, the share of the foreign trade deficit of copper raw materials in copper product deficit fell by 0.9% to 56.16%. The share of copper deficit rose by 2.0% to 39.11%. The share of copper product deficit decreased by 5.3% to 3.89%. The share of copper goods deficit continued to decline, to less than 0.5%.

With regard to the foreign trade of copper material products, despite varying levels of decline in the foreign trade volume of copper materials (excluding copper powder and copper wire), the decline in exports remained smaller than the decline in imports, and the foreign trade of copper material products in the second half of the year fared better than that in the first half. Among them, copper pipes and pipe fittings still achieved a trade surplus, which was $28 million (or -l.34%) less than the previous year. Meanwhile, copper powder, with smaller foreign trade volume, became the second copper material product that achieved a trade surplus, though it was not big. The largest foreign trade deficit and largest import volume were found in copper foil, copper wire, and copper sheet and strip. And the largest import volume was in copper pipe, pipe fitting and copper foil products.

In 2012, there was a change from the previous year in the list of China's major trading partners in copper products. China's biggest source of import was still Chile (annual imports: $16.366 billion, a year-on year increase l0.52%, 22.89% of the total import volume), followed by the United States, Peru, Japan, and Australia (imports ranging from $3.7 billion to $4.7 billion). Hong Kong (annual exports: $1.024 billion, a year-on-year decrease of 15.37%), the No.1 exporting destination of China's copper products in 2011, was overtaken by the Korea (exports: $1.707 billion). They were followed by America, Malaysia, Japan and Taiwan.

As to the foreign trade volume, China's copper products have been the main varieties of imports among non-ferrous metals. Among them, the imports of copper raw materials remain basically steady. Meanwhile, although the exports are subject to change, it is negligible since the change is very small. Although the imports and exports of copper fluctuate greatly, they show a growth trend. There has been a slight decline in the imports of copper materials, the exports of which show growth trend. Although both exports and imports declined in 2012, exports remained larger than imports, with their gap shrinking year by year. Copper goods saw trade deficit and on the other hand, they achieved net exports. However, this phenomenon will not last long, since their exports are also stronger than imports.

In recent years, the newly built or expanded smelting factories and refining factories released their capacity constantly, increasing the China's rigid demand for copper materials. The supply of copper concentrates grew in 2012, which pushed up related pressing fees and made the imports bigger than the previous year. Annual imports totaled 7.8287 million tons, an increase of 22.79%. Notably, imports reached a record level of 935,000 tons. It is expected that China's demand for copper concentrates in 2013 will remain strong. Thanks to the loose supply in the international market and the rise of processing fees, the imports are expected to grow further to 8.5 million tons or so.

In terms of trade patterns of copper concentrate imports in 2012, general trade imports reached 6,604,300 tons, up l3.82%, accounting for 84.36% of the total imports. They were followed by feeding processing imports of 851,100 tons, a year-on-year increase of 130.01%. The sequencing of provinces with big imports of copper concentrates was Shandong (an annual import volume of 1,964,400 tons), Anhui (1,301,400 tons), Jiangxi (1,009,300 tons), Gansu (768,300 tons), Yunnan (739,600 tons), Inner Mongolia (708,300 tons) and Fujian (556,700 tons). Leading all the importing enterprises were SOEs, with imports of 2,830,700 tons, a year-on-year increase of 7.17%. The private sector imported 2,576,900 tons, a year-on-year increase of 70.88%. The joint ventures imported 2,418,400 tons, a yearon-year increase of 9 .41%.

The main sources of imports of copper concentrates in 2012 are still Chile, Peru, Australia, Mexico and Mongolia.

In recent years, thanks to the support of national policies and the growth of domestic demand, China's blister copper imports continued to grow. In 2012, the imports totaled 522,600 tons, a year-on-year increase of 22.54%. In terms of trade patterns, the annual general trade imports is 398,800 tons, which accounted for 76.30% of the total imports, a year-on-year decline of 8.9 %. They were followed by imports of 976,00 tons through processing with imported material, a tremendous increase of 233.11% year on year.

Zambia was the biggest source of China's blister copper, with annual imports of 177,200 tons, a year-on-year increase of 12.44%. Imports from Chile reached l6.65 tons, a year-on-year increase of 35.92%. Imports from the Democratic Republic of the Congo reached 96,700 tons, a year-on-year increase of 10.01%. Imports from Peru and Pakistan were 37,100 tons and 15,500 tons respectively, with the latter up by 5.67%.

In recent years, a bumper harvest is gradually achieved in the development of blister copper overseas. This, coupled with the export restriction policies of some countries rich in blister copper, the lower freight of importing it and the less pollution it causes, has ensured the growth trend for its imports in China. It is expected that blister copper imports will continue to grow in 2013. The imports for the whole year will exceed 600000 tons.

In 2012, China's imports of copper scrap grew in a steady and modest manner. The annual imports totaled 4, 859,400 tons, a year-on-year growth of 3.67%. However, it was still a large gap from the record level of 5,576,900 tons in 2008.

The global economic downturn in recent years also results in a lack of scrap copper output as well as the tight supply of it. This, coupled with the price of refined copper upside down, has weakened the initiative of scrap copper importers. China's scrap copper imports came from ll3 countries and regions around the world, one less than the previous year. Among them, the imports from the United States remained the largest, amounting up to 1,019,300tons, a yearon-year growth of 16.13%. The imports from Hong Kong were 810,500 tons. The imports from Germany, Australia and Spain were 410,300 tons (up 0.98%) 315,800 tons (down 32.85%) and 301,300 tons (down 47.84%) respectively.

The major trade pattern of scrap copper import was still general trade import. The whole imports reached 4,841,500 tons, a year-on-year growth of 3.96%, accounting for 99.63% of the total imports. Similar with the previous year, the major areas of domestic imports of scrap copper still concentrated in Guangdong (1,792,000 tons, down 11.79%) and Zhejiang (1,588,800 tons, down 3.66%). The combined imports of the said provinces accounted for 69.57% of the national total. Tianjin imported 481,000 tons, an increase of 14.22%; Shandong and Guangxi imported 321,800 tons and 191,300 tons respectively.

Among the enterprises that imported scrap copper, private enterprises contributed 2.763 million tons (56.86%) to the total imports. Foreign-funded enterprises, joint ventures and SOEs imported 986,000 tons (down 1.37%), 576,000 tons (up 26.7996%) and 295,900 tons (down 6.82%) respectively.

In recent years, as China expands its refining capacity, its smelting enterprises also increase their demand for scrap copper. However, the lack of supply in the international market pushes up its price, which makes it difficult for the imports to recover. It is estimated that scrap copper imports will continue to grow modestly in 2013, reaching 5 million tons or so.

The import and export volume of copper in the second half of the year showed varying degrees of the decline when compared with the first half. Refined copper exports in the second half fell by over 50% than the first half.

The foreign trade of refined copper fluctuated greatly in 2012. The imports showed a fluctuating downward trend. The exports varied tremendously in different periods -- they were as low as more than 50 tons in January and reached more than 10,000 tons. in May This resulted mainly from the changes in domestic supply, the proportion of domestic price to foreign price and financing copper. The annual imports of refined copper were 3,402,200 tons, a year-on-year growth of 19.99%. The annual exports were 274,000 tons, a large increase of 75.32%. Both hit record highs.

In 2012, bonded area warehousing replaced general trade as the trade pattern by which China imported the largest volume of refined copper.The annual imports through bonded warehousing reached 1,521,000 tons, a year-on-year growth of 75.61%. General trade imports reached l,305,500 tons, a decline of 17.91%. The imports through feeding processing reached 341,500 tons, down by 17.91%. The imports through bonded warehousing were 210,500 tons. The enterprises that imported refined copper were mostly private ones, whose annual imports reached 1,448,800 tons, an increase of 32.66%. They were followed by SOEs, foreign-funded enterprises and joint ventures, with imports of 914,300 tons (up 14.72%), 636,900 tons (up 25.62%) and 346,300 tons (down 12.13%), respectively.

The main source of China's refined copper imports was still Chile, with an annual import volume of 1.31 million tons, an increase of 3.04%, accounting for 38.51% of the total imports. India followed with imports of 271,000 tons, an increase of l3.0l%. Japan and Kazakhstan imported 230,200 tons and 182,200 tons, an increase of 15.09% and 7.29%, respectively.

The growth of domestic demand for refined copper (although the actual growth of demand was not big in 2012), as well as the presence of financing copper caused the copper imports to stand at a high level. At the same time, the adequate supply in domestic market, as well as the domestic price of copper being higher than its foreign price, caused the storage entrepot in bonded area and processing trade export to increase significantly. In 2012, the exports though bonded area warehousing entrepot reached 223,400 tons, a year-on-year growth of 88.05%. The exports through processing trade reached 34,600 tons, an increase of 112.27%. Given the low domestic price and the high inventory at present, it is expected that the exports refined copper will remain strong. The exports are expected to exceed 200,000 tons. The imports will remain high, but will not reach the 2012 level. The number is expected to be around 3 million tons.

China's imports of copper alloy increased by 36.59% year on year, to 54,300 tons. The trade patterns of imports in 2012 were mainly general trade and processing with imported material. The imports through them reached 38,000 tons (up 61.02%) and 13,500 tons (up 1.51%) respectively. The enterprises that imported alloy were mainly private enterprises and foreignfunded enterprises, with imports of 27,800 tons (up 74.84%) and 15,900 tons (5.29%), respectively. The exports of copper alloy were negligible.