Copper import boom. Imports of raw copper amounted to 618,000 tonnes in October, bringing the total for the year to 5.6 million tonnes, already an annual record two months in advance.

This surge seems to be a recovery from the financial crisis of ten years ago.

Then, as now, China sucked the copper surplus from the rest of the world on a combination of low prices, stimulus-driven economic recovery and a wave of stock building, both commercial and strategic.

What has changed this time, however, is that the purchasing chain has not extended to the full spectrum of base metals as it did in 2009. Only aluminium is showing a similar import boom, but there is no sign that China has an appetite for other base metals.

China is eliminating the rest of the world’s copper surplus and, to a lesser extent, aluminium surplus, but the excess of zinc, lead and nickel is being left to accumulate.

China bought 1.17 million tonnes more refined copper this year than last year.

The strength of demand from a rapidly recovering Chinese manufacturing sector has been complemented by a shortage of raw materials.

Imports of copper concentrate increased by only 2% in the first nine months of 2020, failing to keep pace with the expansion of China’s smelting capacity.

Scrap imports, meanwhile, remain structurally low due to China’s higher purity thresholds and the delay in implementing a new system of quotas for high quality recyclable materials. Volumes fell by 47% year-on-year for the period January-September, shifting demand from direct smelting scrap producers to the refined metals segment of the market.

Aluminium imports from China are also growing. The country is the world’s largest producer and trade flows have historically been strongly oriented towards exports in the form of semi-finished products.

China became a net importer of metal in all forms during July and August for the first time since 2009, although the flood of imports showed signs of decreasing in September.

Cumulative imports of primary aluminium, amounting to 766,000 tonnes in the period January-September, did not reach the peaks of 2009, when they reached 1.5 million tonnes. But imports of alloyed aluminium were stronger at 932,000 tonnes, compared to 243,000 tonnes in calendar year 2009.

The increase in demand for alloys is probably also due to China’s reduced contribution of scrap, with volumes of aluminium falling another 49% in 2020.

During the previous crisis, China accumulated large quantities of zinc and refined lead. Imports of refined zinc rose from 183,000 tonnes in 2008 to 670,000 tonnes in 2009, a record that was only broken in 2017.

Imports of refined lead jumped from 31,000 tonnes to 157,000 tonnes in 2009, still the highest annual level of imports.

This time, however, there are no signs of such an appetite for imports. Zinc imports fell by 25% compared to last year to 358,000 tonnes, and lead imports amounted to only 21,000 tonnes, down 76% compared to 2019.

Imports of zinc concentrates increased by 32% in the first nine months of 2020. Lead imports, meanwhile, have fallen by 20%, but from a high base – last year’s imports were the highest since 2015.

The proof, at least so far, is that China’s own production has been able to meet rising demand.

Refined nickel imports from China have so far only reached 98,000 tonnes in 2020, a decline of 40% year-on-year and the lowest level since 2008.

Imports doubled between that year and 2009, but there is no sign that anything similar will happen in 2020.

China’s import needs have changed dramatically over the last decade, reflecting the construction of stainless steel capacity. Stainless steel mills use nickel-pig iron (NPI) or iron-nickel, not refined metal.

The nation’s trade has been dominated by imports of nickel ore from the Philippines and, prior to this year’s export ban, Indonesia. The rapid construction of NPI capacity by Indonesia is now reversing the flow of raw materials to the Chinese stainless steel sector in favour of the intermediate product.