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Copper Falls Despite Higher Chinese Imports, Lower Inventories

April 15, 2019 at 17:18 by Andrew Moran

Copper futures are kicking off the trading week in the red, despite a number of bullish factors that would typically send the industrial metal higher. In addition to the world’s second-largest economy importing more copper, warehouse stocks have slipped for the third consecutive day.

May copper futures fell $0.0135, or 0.46%, to $2.9325 per pound at 17:01 GMT on Monday on the Comex division of the New York Mercantile Exchange. The red metal has had a great start to 2019, advancing more than 10% year-to-date.

According to the National Bureau of Statistics, China imported 391,000 tonnes of copper in March, up 25.7% from the previous month. It is also 26.5% higher than the previous year. Copper concentrate imports also increased in March, climbing to 1.77 million tonnes.

The renewed demand in Beijing comes on stronger credit and improved monetary data. There is also a positive sentiment that the US and China were finally nearing a new trade agreement. Treasury Secretary Steven Mnuchin confirmed that the trade deal would do more to open Chinese markets to American companies as both sides are completing a final round of talks.

Such a development would be good news for China after analysts anticipate its first-quarter economic growth to cool at the weakest pace in 27 years.

Meanwhile, London Metal Exchange (LME)-approved warehouses tumbled 2,000 tonnes to 192,425 tonnes, which represents the third straight day of declines. Moreover, copper inventories in Shanghai Futures Exchange (ShFE)-monitored warehouses dipped 5% from last week to 245,178 tonnes.

In industry news, companies operating in South America are warning of supply disruptions this year, stemming from extreme weather, project delays, and labor negotiations. At the same time, Rio Tinto announced a $302 million investment to develop a copper project in Arizona. Also, the Polish parliament’s lower house approved a 15% cut to copper taxes – the legislation will now be voted on in the Senate.

In other metal commodities, June gold futures shed $2.50, or 0.19%, to $1,292.70 per ounce. May silver futures were flat at $14.97 an ounce. June platinum futures dipped $3.20, or 0.36%, to $895.30 per ounce. June palladium futures plunged $10.40, or 0.77%, to $1,339.80 an ounce.

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