WASHINGTON Chinese copper
imports are set to drop sharply as the country rebalances its
economy after a booming period of growth, an analyst at
Commodities Risk Management Associates (CRM) said.
Copper imports in recent years
have been sitting in warehouses for financing purposes, but
have since been re-exported to London Metal Exchange
warehouses, Far Hills, N.J.-based CRMs Nicholas
The Chinese government is
clamping down on the shadow banking sector that financed the
imports and metal warehousing, he said, adding that this is
already having serious consequences for copper in terms of
"Visible warehouse stocks have
risen above the 2009-11 peak. Just how big is this iceberg
under the water?" he asked.
Theres a high probability
that copper demand could drop further from 2015 to 2020 as
China rebalances and investment stagnates, Sarro-Waite
On this basis, annual surpluses
of more than 1 million tonnes will start from 2014, he said
April 25 at the American Copper Councils meeting in
"The implications are the copper
prices drop to the marginal cost, and that there are dramatic
supply cuts," Sarro-Waite said.