Asia copper buyers disregard strikes from major mines

Asia copper

Asia’ copper industry seems to pay no heed to the strikes that are hampering the output at the world’s two biggest copper mines as it sits on top of stockpiles that have increased by almost two-thirds since the end of January.

The latest data shows that copper inventories linked to China’s Shanghai Futures Exchange have increased to 61 percent since January to 277,659 tons, the most ever since May 2016. According to consultants CRU Group, stockpiles in bonded warehouses in China have gone up above 500,000 tons, from around 450,000 tons in November.

BHP Billiton announced a force majeure  last week on contracted copper shipments from its Escondida site in the world’s largest copper mine, Chile, and Freeport-McMoRan Inc. hs sent home workers from its Grasberg facility the world’s second-largest mine.

Outages have not worried the market one bit due to the amount of copper stockpiles.

A BHP customer in shanghai with a delayed February shipment said that “In China's bonded market there is still a lot of stock, so we are not that worried about the force majeure for now.”

According to customs data, copper ore and concentrates imports to China surged in the months before the disruptions in addition to the high copper inventories. Imports for November was a record 1.76 million tons, with December slightly below at 1.67 million tons.

Copper prices have risen while Chinese premiums remain steady with three-month copper on the London Metal Exchange going for $6,204 a ton on Monday. This is the highest level since May 25.

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