FxWirePro: China to append stress on copper prices

The prices of industrial metals (Copper and nickel) showing strength but supply abundant Base metals are consolidating recent gains at the end of a week which has seen strength in copper and nickel prices, which are both up in excess of 6% this week.

This is reflected in the base metals complex (LMEX) surging higher amid further gains in global equity markets and a weakening dollar, as shown in the chart below left.

The upswing in global economic activity is continuing, manufacturing PMI’s remain in expansion territory and there have been upside surprises to Chinese economic data.

China to ban copper scrap imports by end of 2018 China’s State Council plans to stop the import of waste products that could be sourced domestically by the end of 2019, according to Metal Bulletin (MB).

MB cites an official document which was released on 27 July, setting out the government’s aim to crack down on pollution generated from the processing of imported waste.

Industry and media reports suggest that China will limit the import of category 7 copper scrap effective end-2018. Such a move will likely affect less than 1 million tonnes of scrap (of the 3.35 million tonnes imported last year) because the authorities seem to be after only certain grades. This theoretically should lead to more cathode (refined copper) buying to replace the scrap not being brought into the country. However, it did not disclose which scrap metals may be banned. While copper was up 0.12% to $2.881 a pound.