China's net imports of refined copper dropped to a one-year low in July as the world's largest buyer found itself in competition with the U.S. for metal.
The scramble to ship copper to the U.S. ahead of threatened tariffs, deferred for now, extended to China's bonded warehouse stocks.
China "exported" 121,000 metric tons of copper to the U.S. in the first seven months of 2025. The shipments started after President Donald Trump announced a national security investigation into U.S. copper import dependency in February.
However, since U.S. customs counted in only 15 tons of refined Chinese copper over the first half of 2025, it's clear that China's "exports" were actually re-exports of previously imported non-Chinese metal.
The drain on bonded inventory has stimulated China's own import appetite but the country has had to diversify its supply base to compensate for the U.S. pull on refined copper.
RECORD FLOWS
China's outbound shipments of refined copper totaled 426,000 tons in the January-July period, already higher than any previous calendar year with the exception of last year's 458,000 tons.
The mid-year export spike in 2024 was caused by a short squeeze on the CME contract which resulted in the U.S. premium over the London Metal Exchange (LME) price widening to what was then an unprecedented $1,100 per ton in May.
Chinese smelters made hay from the global pricing disconnect by shipping metal to LME warehouses in Taiwan and South Korea.
LME holdings of Chinese copper amounted to just 400 tons in February 2024. By August they had mushroomed to 164,000 tons.
It was, with hindsight, a dry run for this year's even greater tariff disconnect.
The CME premium to the LME stretched to almost $3,000 in July before collapsing in August, when the U.S. administration confirmed tariffs on copper products but pushed back a decision on refined copper until next year.
Chinese smelters have once again shipped metal to the LME, where registered stocks of Chinese copper jumped from 25,000 tons to 98,000 tons over the course of July.
The turnaround of metal in Chinese bonded warehouses has also been complemented by higher outright exports to Thailand and Vietnam. Neither country hosts LME warehouses, suggesting China has been plugging supply-chain gaps opened up by the scramble to get the right sort of copper for U.S. delivery.
CHILEAN DIVERSION
CME's list of deliverable brands is largely limited to domestic and South American brands, Chilean in particular.
U.S. imports of Chilean copper exceeded 500,000 tons in the first half of the year, compared with 650,000 tons over calendar 2024.
Much of that extra metal was stripped out of LME warehouses and Chinese bonded stocks as well as the physical supply chain.
It's noticeable that China's imports of Chilean copper have cratered since the tariff trade started.
Arrivals of Chilean metal fell below 20,000 tons in both June and July for the first time since 2006. The year-to-date tally of 203,000 tons is down by almost half on the same period of 2024.
Chinese buyers have turned to the Democratic Republic of Congo, Russia and Zambia to compensate for the loss of Chilean copper.
The Congo has emerged as China's main refined copper supplier over the last couple of years and that position has been cemented this year with cumulative imports of almost 820,000 tons in the January-July period.
Russia has long been a major import source for Chinese buyers, but the pace of arrivals has accelerated significantly this year.
Monthly imports of Russian copper are now regularly exceeding those from Chile and cumulative January-July arrivals of 269,000 tons were up by 123% on last year.
China's imports of Zambian metal have also more than doubled to 95,000 tons as buyers look for alternative non-Chilean material.
IMPORT APPETITE
The scale of China's exports and re-exports masks the country's continued hunger for refined copper.
Imports were 2.2 million tons in the first seven months of 2025, closely tracking last year's levels.
Indeed, China's import appetite seems to have grown stronger over the last couple of months in reaction to the combination of lower port stocks and direct smelter sales both to the LME and other Asian consumers.
The country is also facing a shortage of recyclable copper scrap, which means increased demand for refined metal. Imports of scrap fell by 1% in the January-July period relative to last year.
The U.S. has historically been the largest supplier of scrap to China, but the trade has shrunk dramatically this year after China included copper scrap in its reciprocal tariffs on the U.S.
China's year-to-date imports of U.S. scrap have slumped by 49% and July's count of 930 tons was the lowest monthly total in over 20 years.
As with refined copper, Chinese buyers are diversifying by lifting imports from Europe. But this may be only a short-term solution, given that the European Union is actively considering export restrictions on recyclable metal.
The geopolitical dislocation to the refined copper market may be close to running its course after the push-back of U.S. tariffs, but the disruption to global scrap flows may only just have started.
The opinions expressed here are those of the author, a columnist for Reuters.
