Surge in Chinese metals demand not a sign of revival: experts

14 April 2009

The record intake of metals by China risks oversupply and could actually slow the pace of any recovery in demand, warned analysts, adding that the large scale of iron ore imports could create a stockpile that would further drag down steel prices, already under siege after a small rally early this year.

China imported record amounts of iron ore and copper in March, even as underlying economic activity remained soft.

Imports of copper, copper alloy and semi-finished copper products also rose 56 per cent year on year to 374,957 metric tonnes, surpassing February's record 329,311 tonnes, China's customs agency said.

There are reports that the world's biggest copper producer, Chile, has completely sold its next three months' output to Chinese buyers.

Chinese steel mills also shipped in 52.1 million tonnes of iron ore, up 46 per cent on year, even though their steel production in the first two months of the year hasn't risen at the same pace as these raw material imports.

"A big upturn in demand is unlikely this year," said a steel analyst. "The recovery is not mature yet, though there are signs of demand stabilising."