The most recent reading on Chinese imports was dismal (Chart 3). February imports were down 15.1% from January and 38.5% below February 2012. It was the smallest monthly import figure since June 2011. China is by far the largest consumer of copper in the world. Monthly Chinese imports have been in a downtrend since late 2011, and if that trend were to continue, the implied drop in Chinese usage alone could bring prices down with a thud.
Global inventories have increased significantly since they bottomed last fall. Combined LME, COMEX, and Shanghai warehouse stocks have nearly doubled, to 762,000 tonnes, during this period (Chart 4). That does not tell the whole story, though. Stocks in Chinese bonded warehouses, which are not included in exchange warehouse figures, are rumored to have doubled over the past year to 1 million tonnes.