Andy Home of Reuters reports that the break in normal Chinese copper trade patterns has punctured a bull narrative of constrained supply and cyclical demand recovery. He writes:
A rare burst of Chinese exports has deflated bull spirits in the copper market, with funds dumping long positions and prices down by 16% from the record highs seen in May.
The world’s largest buyer of copper shipped out an unprecedented 158,000 metric tons of refined metal in June. First-half exports of 302,000 tons were already higher than any full calendar year since 2019.
This break of normal trade patterns has punctured a bull narrative of constrained supply and cyclical demand recovery.
Weak Chinese purchasing managers indices show that activity in the country’s manufacturing sector sank to a five-month low in July, reinforcing Doctor Copper’s gloomy message. […]
China’s export burst, meanwhile, appears to be winding down, with outbound shipments falling to 70,000 tons in July.
ShFE stocks have been sliding since the start of July, and at 262,206 tons are now 75,000 tons below the June peak.
The Yangshan import premium, which fell into negative territory in May, has risen to $53 per ton.
It may not be too long before some of what China has exported turns around and heads home.
Read more here.
