Copper ended lower in March for a third month in a row. Copper was trading between $6532-$7064 before ending at $6740.5. For the first quaret of 2018, LME copper edged down 7 percent, not exactly a good start to the year. Several reasons are behind the decline, the most prominent being trade war anxitous between US and China. Both actions sent a chill through ferrous and nonferrous complexes, as investors became rightly concerned that the world’s two most powerful economies could get embroiled in an escalating trade war. A steady increase in copper exchange stocks also weighed on prices; combined stocks at both LME and SHFE were up roughly 18% this past month and have almost doubled vs. this time last year.

The refined copper market ended 2017 with a deficit of about 163,000 tons, this according to the latest ICSG report, up from the group’s original projection of 150,000 tons. The ICSG expects the 2018 deficit to shrink to 105.000 tons, not a particularly high number and one that could easily flip into a surplus if Chinese demand starts to flag. So far in 2018, there is not much evidence of that. On the trade side, China imported a little over 544.000 tons of refined copper in the first two months of 2018 — up 6.3 percent year-on-year.

For the year as a whole, Antaike sees Chinese refined consumption rising by 3.3 percent to 11.1 million tons, while domestic refined output is expected to hit 8.35 million tons, a 4.3percent y-o-y increase. This would mean that China would still need to import roughly 3 mln tons of copper, down 7.5 percent from 2017 levels (this according to Antaike), but a sizable number nonetheless.