China’s copper imports fell sharply in the latest trade data, with unwrought volumes declining 11.5% year-on-year while concentrate flows also weakened, according to ING strategists Ewa Manthey and Warren Patterson. The persistent import weakness from the world’s largest copper consumer stands in stark contrast to the bullish positioning currently seen in copper markets, creating a notable disconnect between physical demand fundamentals and speculative sentiment.
This divergence raises questions about the sustainability of recent price support in copper markets, as financial positioning appears increasingly detached from underlying consumption patterns in China. The weak import figures suggest softer domestic demand despite recent stimulus measures from Beijing aimed at reviving economic activity. Traders are now watching whether speculative length in copper futures can maintain elevated prices amid deteriorating physical market signals from China’s manufacturing and construction sectors.
FXnCO Insight
Monitor copper price vulnerability as the gap between weak Chinese physical demand and bullish speculative positioning suggests potential downside risk if fund flows reverse.
Source: FXStreet