Copper shipments pick up in the middle of a negative month for exports

A surprising rebound recorded copper shipments in August. According to the Central Bank, metal exports rose 10.3% in twelve months, reaching US $ 3,068 million, the best figure since July last year. Mining as a whole rose 7.8% to US $ 3,302 million in the eighth month.

For the executive director of Plusmining, Juan Carlos Guajardo, the rebound in metal shipments reflects the change in China's productive structure.

"You have to look very well at what is happening in the world copper industry, since China's imports of copper concentrate and iron ore are still quite high," he explained.

Purchases of copper concentrate from China in the eighth month registered a rebound of 9.3%, compared to the same period of the previous year, according to the Customs of that country.

"If we talk about refined copper, the figures probably show a certain weakness and in fact, the data that China reported on imports were relatively weak, but those of concentrates are still at quite high levels," said Guajardo.

Regarding future behavior, the economist at BCI Estudios, Antonio Moncado, mentioned that despite the decline of 3.8% of China's copper imports, it maintains positive prospects for copper in the remainder of the year.

The manager of Sonami Studies, Álvaro Merino, mentioned that in the first seven months of the year 73 thousand tons less of copper were sent to China compared to the same period of the previous year, registering 1,568,000 tons.

In September, it is projected that the amount exported again will experience a rebound, given the low comparison base given that in the ninth month of 2018 330 thousand tons were sent, which meant the lowest monthly record of the year.

In a similar position, the director of Studies and Public Policies (s) of Cochilco, Víctor Garay, explained that the rebound is due to the low comparison base of August 2018. However, he says that China has experienced a change in composition of its demand, raising the proportion of copper concentrates at the expense of refining imports. This is how while the former grew 10.6% in August, the latter fell 10%.

Of course, for the remainder of the year it visualizes a fall in the exported value of red metal due to a "slight decrease in copper mine production along with the lower average price of copper during 2019 compared to 2018.

For Gabriel Cestau, of Santander, this change in the demand of China does not compensate for the weakening of said economy and considers that this rebound in August is "transitory".

The negative

The red metal was the exception in a scenario of falls of the Chilean commercial exchange, hit by the commercial war. Thus, exports fell 4.5% when registering shipments for US $ 5,952 million in August.

Industrial exports registered their greatest decline since the end of 2015. In August, they gave up 17.4%, adding shipments for US $ 2,321 million.

To this was added the drop in agribusiness shipments, with a 9.5% decline with a total of US $ 329 million.

Downward imports ratify the weakness of domestic demand

A contraction in all its segments registered imports in August. According to the figures delivered yesterday by the Central Bank, total purchases of goods fell by 11.4% in the eighth month compared to the same period of the previous year, registering US $ 5,809 million.
For the economist at BCI Estudios, Antonio Moncado, the fall evidenced by consumer goods of 13.9% -which reached US $ 1,853 million- and capital of 6.7% -with a US $ 1,265 million- "It is related to the lower propensity to consume durable goods and postponement in the realization of private investment projects."
By product, in what are consumer goods, the first drop of beverages and alcohols in nine months stands out with 18.8%, when adding purchases for US $ 36 million.
To this are added the setbacks of car internment with 25.2%, clothing with 18.2% and footwear with 15.1%.
For Itaú Economic Analysis, the performance of imports was "even worse" than what exports registered. "As copper prices remain low and domestic demand remains weak, we expect a current account deficit of 3.2% of GDP this year, but the risks are inclined to a larger deficit," they said.
The report of said entity indicates that "the fall in imports of consumer goods reinforces the expectation of weak consumption, weak imports of intermediate goods and the drop in manufacturing exports indicate that industrial activity would not support growth."
Regarding the imports of capital goods, which in August totaled US $ 1,265 million, the 49.6% increase in buses stands out, together with 10.7% of mining and construction machinery.
For Itaú Economic Analysis, in general terms "the moderation of imports of capital goods is not a good omen for the expected dynamism of the investment."