China has become the world’s largest copper consumer and an important factor influencing international copper prices. In recent years, China’s refined copper consumption has basically maintained about half of the global refined copper consumption, accounting for 50.16% from January to August 2018, and China’s copper imports accounted for the proportion of global copper mineral production.
Up to 70% of the total, whether supply or demand, the change of supply and demand in China’s copper market has an important impact on the international copper price.
The increase of domestic copper import and domestic refined copper output will have a significant negative impact on the international copper price, but the impact of refined copper output has a certain time lag. The short-term increase of domestic copper import will lead to the rise of international copper spot price. Domestic Copper Mine Import and Refining Copper Production
As an important factor directly affecting the supply side of copper market, the increase of copper import and refined copper output will lead to the oversupply of domestic refined copper market, which will lead to the decline of copper prices in Shanghai, and then lead to the fall of copper prices in Lun. However, due to inertia and hysteresis of production, the output of refined copper is higher than that of copper.
The impact of price lags behind, while the large increase of domestic copper imports in the short term will squeeze the foreign copper spot supply and raise the copper spot price in the short term.
The growth of domestic copper production has a positive supporting effect on the international copper price, but the transmission mechanism is not sensitive. As a direct driving factor of domestic copper market demand, the increase of domestic copper production has a positive supporting effect on copper price, but due to the long-term overcapacity of the domestic copper market,this leads to the insensitivity of demand-side conduction mechanism.
In addition, domestic copper scrap imports and refined copper imports and exports are affected by international copper prices. Domestic copper scrap imports and refined copper imports as alternative or supplementary means of production, demand elasticity is greater, but affected by international copper prices, fluctuating with the rise and fall of international copper prices.
Post time: Dec-26-2018