A worker on an electronic copper foil production line at Jiujiang Defu Technology Corp. in Jiangxi province in eastern China, January 19. Photo: VCG
Chile, the world’s largest exporter of copper ore, has announced plans to close its borders for 30 days amid the raging COVID-19 pandemic, which has caused uncertainty over global copper supplies.
While China needs to further diversify its metal import channels, the country is unlikely to turn to Australian copper given China’s own import structure and deteriorating relations between Canberra and Beijing, industry analysts said Thursday.
As the pandemic resumes in Chile, which accounts for a third of the world’s copper ore production, the South American country has decided to close its borders for 30 days starting Monday.
In response, the price of copper futures on the London Metal Exchange rose 3.6 percent to $ 9,104 per tonne.
Experts believe that amid growing uncertainty, China – the world’s largest importer of copper ore – must diversify import sources to hedge against risks. China is likely to boost imports from other major sources of copper ore such as Peru and Mongolia as domestic demand remains strong, Chinese metals analysts told the Global Times.
“Given that China’s copper ore imports from Australia accounted for only about 3.5% of total imports in 2020, coupled with a deteriorating bilateral relationship, Australia’s copper imports to China are unlikely to change,” said Wang Guoqing, director of product development. Beijing Lange Steel Information Research Center told the Global Times on Thursday.
According to the OEC, an online data visualization and dissemination platform focused on geography and economic dynamics, China was the largest copper ore importer in the world in 2019 when it acquired $ 31.3 billion worth of metal, accounting for 52.3 percent of the total production. total world production.
The amount of copper a country uses is a direct barometer of its industrial strength.
The country imported 21.8 million tons of copper ore in 2020, according to Chinese customs, of which 7.72 million tons came from Chile and 783,746 tons from Australia.
In December 2020, China’s imports of copper ore from Australia suddenly dropped to zero. The sharp decline was widely seen by the Australian media as a countermeasure to China after Canberra launched a series of hostile actions against China, including a ban on Huawei’s 5G equipment, although China has never formally acknowledged such claims.
“Copper imports from Australia to China have shown a downward trend in recent years. Given the deterioration in bilateral relations, China does not need to increase imports from Australia, since its share is small, and the closure of Chile’s border for one month won. ” “They influence the supply too much,” Wang said.