One source of relief for copper producers has been the recent strength of China’s copper imports. This has been somewhat surprising given that other indicators point to weakening Chinese economic activity. One explanation has been that copper is being imported as part of financing deals rather than for end-use in China. It is impossible to quantify the scale and impact of this activity with any confidence. But, in our view, a combination of a clampdown by the authorities and lower returns on the deals will mean that their ability to impact the copper market will diminish in 2014.
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