China Copper Imports Dip 12% on Financing Probe

Copper imports for China fell to 340,000 metric tons in August, a decline of 12 percent. The drop was mostly due to a drop in shipments a year prior due to a government investigation into fraudulent metal financing at Chinese ports. However, restarts at local copper processing mills added to domestic production, which affected the decrease in imports as well, according to the Wall Street Journal.

As quoted in the publication:

Chinese authorities earlier this year launched investigations into alleged fraud involving aluminum and copper stocks used as collateral for loans in China. Commodity-backed financing has fueled imports of copper in recent years, but this appears to be ebbing due to the investigations.

In the longer run, tight supply globally could lend support for copper prices despite China’s anemic demand, analysts said. Barclays pointed to supply disruptions in Indonesia, which has put bans on the export of unprocessed copper.

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