Copper Edging Toward All-Time High Territory

By Glenn Dyer | More Articles by Glenn Dyer

World copper prices were given a sharp boost on Wednesday after China’s September trade data revealed a rise in metal imports in the month – the first rise for five months.

Gold also rose on higher US inflation data but iron ore dropped after news of an extension of production cuts for much of the Chinese steel industry into the first quarter of 2022.

Comex copper prices jumped nearly 20 cents a pound to top the $US4.50 level for the first time in a month.

September’s rise reversed the trend to lower import volumes since earlier this year, ostensibly taken as a reaction to world prices hitting all-time highs in May and remaining around that level for through August.

Prices eased in September to less than $US4.20 a pound for Comex traded metal and it seems that fall seems to have spurred a rise in imports

Comex Copper for October delivery in New York rose 4.42% to $US4.5205 on Wednesday, the largest one day rise since April 27, this year.

That left copper just 5.4% down on its all-time high of $US4.7785 a pound on May 11. Copper is up 10.5% so far in October in a solid rebound and it is also up more than 28% year to date in 2021.

Arrivals of unwrought copper and products into top copper consumer China totalled 406,016 tonnes in September, China’s General Administration of Customs said.

That was up 3% from 394,017 tonnes in August which was the lowest import figure since June 2019.

However it still down nearly 44% from September 2020, which was the second-highest monthly total on record but when metal prices were less than $US3 a pound (hence a buying opportunity for Chinese importers).

In the first nine months of 2021, China’s copper imports fell 19.5% year-on-year to 4.1 million tonnes.

Imports of copper concentrate, or partially processed copper ore, followed metal volumes higher last month for the first time since March.

The volume of concentrates imported last month was 2.11 million tonnes up 11.9% from 1.886 million tonnes in August but slightly down from 2.138 million tonnes in September 2020, the second-highest monthly total on record.

Exports of unwrought aluminium and products, meanwhile, were at 491,985 tonnes in September, the highest monthly level since March 2020. They were sold into a global market were aluminium prices rose through decade-high prices in the month (and were at 13-year high prices last week).

Aluminium metal exports were up slightly up from 490,286 tonnes in August, and up 15.4% from September 2020. The rise in exports also came despite plant in some provinces being forced to cut production because of power rationing or to curb carbon emissions.

Gold prices jumped to a month high after US consumer price inflation edged higher in September to an annual headline rate of 5.4% from 5.3% in August.

December Comex futures settled at $US1,794.70, up 2% on the day.

Earlier in the session, gold was very volatile, first dropping nearly $US20 to $US1,760 and then surging back up towards $US1,800 an ounce following higher-than-expected US inflation figures for last month.

Iron ore prices fell by more than 4% for the 62% Fe fines Pilbara type of ore from Australia to a still solid $124.17 a tonne after confirmation of 30% production cuts ordered by the Chinese government for much of the northern-based steel sector for November to March.

These actually extend the 2021 production cuts to March next year for many producers.


About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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