Chinese Copper imports

Imports are coming down as credit is getting tightened

The message from these two charts is simple: Chinese copper imports are coming down as credit is getting tightened. As a result, Shangai inventories are being drawn-down. We would expect imports to bounce back in July-August when 1- copper prices will fall further and 2- inventories will be so low that China will be forced to import again.

Chinese Copper imports ( SHFCHAD Index GP):

They are coming down as China is tightening credit and trying to move prices down.

Shangai Copper inventories ( SHFCCOPD Index GP) are coming down as a result

CONCLUSION: as soon as the inventories will fall much below 100,000 T we may see the Chinese back importing massively which we see in July-August.

The only downside risk is further credit tightening which may limit Chinese imports.