Key Moments
- Chinese iron ore imports increased 10% year-on-year in January/February, contrasting with weaker steel production.
- China’s copper ore and concentrate imports rose 4.9% from a year earlier, while imports of raw copper and copper products dropped 16%.
- Potential sulphur supply disruptions from the Gulf may threaten copper ore production in Congo, which already accounts for 14% of global supply.
China’s Metal Imports Signal Strong Copper Ore Demand
Commerzbank FX & Commodity Analyst Volkmar Baur reports that Chinese imports of iron ore and copper ore remained robust, even as other segments of the metals market showed signs of weakness. The import data suggest that domestic copper production in China is still expanding, despite unfavorable economic conditions for smelters.
According to Baur, “Chinese metal imports got off to a mixed start this year. Iron ore imports once again bucked the downward trend in steel production, rising 10% year-on-year in January/February.”
He notes that “Imports of copper ore and concentrates were also up 4.9% on the previous year, although at around 2.5 million tons per month, the level was only slightly below that of previous months. Imports are normally lower at the beginning of the year than in the rest of the year due to the Chinese New Year celebrations.”
Diverging Trends in Copper Ore vs Refined Copper Flows
While inflows of copper ore and concentrates increased, Chinese purchases of refined copper and semi-finished copper products moved in the opposite direction. Baur points out that “In contrast, imports of raw copper and copper products fell by 16% compared to the previous year and, at around 350 thousand tons per month, were also significantly below the level of recent months.”
This divergence between ore and refined metal imports hints at stronger domestic smelting activity. Baur explains, “Although production figures will not be reported until next week, imports indicate that copper production in China continues to rise. This is despite the fact that treatment and refinery charges remained negative in February, meaning that copper smelters have to pay mines a premium for the right to refine the copper.”
| Indicator | Change vs Previous Year | Approximate Monthly Level |
|---|---|---|
| Iron ore imports (China, Jan/Feb) | +10% | Not specified |
| Copper ore and concentrates imports (China) | +4.9% | ~2.5 million tons |
| Raw copper and copper products imports (China) | -16% | ~350 thousand tons |
| Congo copper ore share of global output | Not applicable | 14% of global output |
Supply Risk: Sulphur Constraints Threaten Congo Copper
On the supply side, Baur flags a separate risk emerging from the Gulf region that could affect one of the world’s key copper-producing areas. Disruptions to sulphur exports linked to Iran are raising concerns about future output in Congo.
He notes that “As the Gulf region is a major producer of sulphur, which is currently unable to reach world markets due to its location on the Strait of Hormuz, there could be production problems for copper ore in the Congo in the coming weeks.”
The issue centers on sulphuric acid availability, which is critical for copper ore processing. The potential shortage comes on top of the fact that Congo already accounts for 14% of global copper ore production, amplifying the potential impact on the broader market.
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