China Copper Imports Rise 53% in January as Commodity is Used as Collateral to Get Credit
By Vittorio Hernandez | February 13, 2014 9:13 AM EST
Copper prices have outperformed the overall metals market as traders have closed short selling in expectation of government intervention to boost growth, but the metal may still be "slightly overvalued," according to a Monday report by Barclays.
YouTube/Al Jazeera English
Higher demand from Chinese buyers led to a record-high importation by China of cooper and iron ore from major sources such as Australia and Chile. Bloomberg reports that besides using these commodities for construction, it also serves as collateral to secure credit.
In January, shipment of copper to China went up 53 per cent to 536,000 metric tonnes compared to a year ago. Shipment of iron ore for the same period grew 32 per cent to 86.83 million tonnes, according to the country's General Administration of Customs.
With the unexpected strong demand for the two commodities by China, it may help reduce forecast global surplus of these materials and support copper futures that shed 3.2 per cent since January in London as well as the 11 per cent reduction in iron ore delivery to Tianjin.
But the Sydney Morning Herald partly attributed the record-high importation of copper and iron ore to stockpiling ahead of the Chinese Lunar New Year holidays instead of higher consumption of the two materials.
Sijin Cheng, a commodities analyst at Barclays agreed that stockpiling is partly the reason for the surge in shipment, and she forecast that February import figures would go down.
Mark Keenan, head of commodities research in Asia at Societe Generale, said, "If China retains an element of stability, it will calm sentiment toward the rest of the emerging markets."
To contact the editor, e-mail:
Join the Conversation
- While Australian Miners Declare End of Massive Expansion of Iron Ore, Gina Rinehart Bucks Trend & Starts Export From New Mine
- Australian Stock Market Report – Midday November 25, 2014
- Australian Stock Market Report – Morning November 24, 2014
- Australian Stock Market Report – Morning November 25, 2014
- Australian Stock Market Report – Afternoon November 24, 2014
- Kobani ISIS Fighter Sends Out Desperate Message For Prayers And Support: Euphoria Turns Into Desperation As Kurds Advance
- Chris Algieri’s Battered Face Trends On Social Media
- Home Depot Early Black Friday 2014 Sale Up To Nov. 29, 2014 Includes Special Buys On Appliances Such As Samsung Refrigerators, Whirlpool Electric Ranges And Hoover Vacuum Cleaners
- Black Friday Sale 2014 Deals From Amazon On Smartphones, TVs, Headsets And More
- Microsoft Band Runs Out Of Stock, But Offers $10 Gift Voucher To Wait-Listed Customers
- Andrew Robb Asks Obama Not to ‘Lecture’ Australia on Climate Change
- Highest Paid NBA Players 2014: NBA Stars Who Earn More Than LeBron James