China's overall copper imports rise in December, trend to continue in 2017

China's copper trade data for the month of December showed that overall copper imports rose in December, posting a solid close to a strong year for China’s copper market. Details of the report were as follows:

Refined copper imports - Net imports of refined copper rise by 24 percent m/m to 331kt. Compared to December 2015, net refined imports were lower 17.8 percent y/y. The decline in refined copper imports is attributable to the massive increase in China’s domestic refining and smelting sector.

Copper scrap imports - December copper scrap imports remain stable, unchanged m/m, totaling 329kt . On an annualised basis, copper scrap imports declined 14 percent y/y. Increased availability of copper concentrate and ore and relative tightness in the scrap market seen as the likely cause for decline.

Copper ore and concentrate imports  - Copper ore and concentrate imports decline to 1,670kt in December, a 90kt or 5 percent m/m drop from the previous month.

"We estimate that China’s imports of the metal rose by 7.9% y/y. In the coming year, we expect the trends that drove 2016 to continue, although growth rates should moderate as China’s copper demand slows." said ANZ in a report.

Technical studies support upside in copper prices. Copper has broken above 5-DMA after bouncing off major support by 50-DMA. We see scope for test of major trendline resistance at 2.70. Further upside only on break above. Major support on the downside is seen at 2.58 (converged 50&20 DMAs). Break below could see drag upto 2.489 (38.2% Fib retrace of 2.064 to 2.752 rally).