China released its preliminary trade data for metals this morning, showing strong domestic demand for industrial metals. Imports of unwrought Copper rose 1.2% YoY to 425.1kt in August. However, cumulative Copper imports are still down 2.2% YoY to 3.5mt in the first eight months of the year. Uncertainty over US tariffs on Copper imports shifted supply from China to the US in the first half of the year, ING's commodity experts Ewa Manthey and Warren Patterson note.

Iron ore shipments steady

"This trend may reverse in the second half, as Trump has delayed plans for a 50% tariff on refined Copper for now. Meanwhile, Copper concentrate imports increased by 7.4% YoY (+7.8% MoM) to 2.8mt as strong domestic refined output boosted demand for raw materials. On a year-to-date basis, imports of Copper concentrate rose 7.9% YoY to 20.1mt. In ferrous metals, iron ore imports rose 3.8% YoY (+0.7% YoY) to 105.1mt in August. However, cumulative iron ore imports are still down 1.6% YoY to 801.6mt in the first eight months of the year, due to China’s continued efforts to eliminate industrial overcapacity."

"On the export side, China’s unwrought Aluminium and Aluminium products shipments fell over 9.6% YoY (-1.2% MoM) to 533.5kt, while exports of steel products rose marginally annually to 9.5mt last month."

"Meanwhile, the latest positioning data from the CFTC shows that speculators increased their longs of COMEX Copper by 7,014 lots for a fourth consecutive week to 34,651 lots as of 2 September. The move was largely driven by rising gross longs by 6,436 lots to 46,443 lots over the reporting week. In precious metals, managed money net longs in COMEX gold increased by 20,740 lots for a second straight week to 168,862 lots over the reporting week. Similarly, speculators increased the net longs of silver by 6,817 lots for a third consecutive week to 41,022 lots as of Tuesday, following an increase in gross longs by 3,816 lots to 53,117 lots. Money managers have been raising their net long exposure to precious metals recently, following changes in expectations for Federal Reserve interest rate cuts this month."