Industry Trend Analysis - China Turns To Neighbours For Copper Ore - JUNE 2016

BMI View: China ' s copper ore imports will remain elevated as the country fills the gap between growing refined produ ction and stagnant mined output . The country will increasingly turn to Central Asian neighbours and Africa for copper ore imports.

China, the largest consumer of copper globally, will maintain elevated ore import levels due to a domestic deficit. For instance, in Q116, China's total copper ore and concentrate imports increased by 33.1% q-o-q to 4.0 million tonnes (mnt) from 3.0mnt in Q115. In 2016, we forecast China to produce 7.8mnt of refined copper compared to 1.8mnt of mined copper. While some of the refined production is sourced by recycled scrap metal, mined copper ore will remain the predominant ingredient for refined production. As such, we expect ore imports to remain elevated over a multiyear horizon, while refined copper imports will increase in the short term due to positive sentiments surrounding the domestic construction sector and government spending on infrastructure.

Latin America will remain China's largest source of copper ore, with Chile and Peru accounting for a combined 48% of total imports in 2015. Peru in particular will ramp up output over the coming years, with an export-oriented project pipeline boosting copper production from 2.0mnt in 2016 to 2.6mnt by 2020.

Copper Ore Imports Will Fill The Gap
China - Refined Copper Production & Copper Mine Production ('000 tonnes)
f = BMI forecast. Source: National Sources, BMI

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