Imports and Exports of Copper Semis Slumped in January due to CNY holiday

 SMM expects that China’s copper semis imports in January to have fallen 33.41% MoM and 47.41% YoY to 22,000 mt.

 Exports are estimated to stand at 31,500 mt in January, down 36.18% MoM, and down 55.82% YoY.

 We believe that the sharp month-on-month drop in copper semis imports in January was due to the CNY holiday.

According to customs data, the total import volume of copper rods and copper wires from January to December 2022 was 142,100 mt, a significant decrease of 23.7% year-on-year; the import volume of copper strips in the same period was 99,800 mt, a sharp decline of 21.9% year-on-year; the import volume of copper foil was 172,100 mt, down 21% year-on-year; the import volume of copper pipes was 23,800 mt, a year-on-year decrease of 17.5%. Imports fell precipitously across all copper semis as high domestic copper semis quality has reduced the reliance on overseas products. SMM expects this situation to continue into 2023. The export volume of copper semis products in January will also experience a seasonal decline due mainly to CNY holidays. The weakening overseas demand is also one of the reasons. According to customs data, the total export volume of copper rods and copper wires from January to December was 92,400 mt, an increase of 2% year-on-year; the export volume of copper plate/sheet and strip in the same period was 99,500 mt, a surge of 25% year-on-year; the export volume of copper foil was 134,000 mt, an increase of 1% year-on-year; the export volume of copper pipes was 351,500 mt, a year-on-year decrease of 2%. While exports of copper pipes dipped, those increased across all the other copper semis products, with the most significant growth in the export of copper plate/sheet and strip.

The remarkable improvement in domestic quality and stronger overseas demand accounted for the surge in plate/sheet and strip exports. The export decline can be also reflected in the Shanghai Export Containerized Freight Index (SCFI) which stood at 1,006.89 as of February 3, a drop of 54.25 or 5.1% from 1,061.14 at the beginning of January.

Domestic demand is expected to recover on the back of policy stimulus. Overseas demand is expected to recover at a slower pace. The European and US economies are at risk of falling into recession due mainly to belt-tightening of households.