(Reuters) – Buyers in China, the world’s top copper importer, are eyeing a resumption of trade with Australia as ties between the two countries improve ahead of an expected visit by Trade Minister Don Farrell to Beijing.
China is gradually easing a raft of unofficial restrictions and tariffs placed on Australian imports including coal, copper ore and concentrate and barley in 2020 at the height of a diplomatic spat over trade, security and the origins of COVID-19.
Farrell said last week he would travel to Beijing “very soon” for trade talks with his counterpart after a virtual meeting in February. An unofficial ban on Australian coal imports lifted in January.
Copper ore and concentrate imports are likely to resume if the talks go well, according to an official surnamed Wang at a Chinese copper smelter, who said smelters want extra supply from Australia. The official declined to provide a full name due to the sensitivity of the issue.
Australian copper accounted for just 5% of Chinese imports in 2019 but is an important source of supply in what is expected to become a tight global market.
The world’s top refined metal producer has lifted copper production to a record high this year, propelling demand for the raw material imports it heavily relies on.
“Some buyers were heard to have applied to customs to import Australian copper,” according to a Chinese analyst who spoke on condition of anonymity, due to the sensitivity of the issue.
Chinese customs could not be reached for comment.
Australian trade data shows exporters already shipped A$60.5 million ($41.04 million) worth of copper ore and concentrate to China in January, though the cargoes do not appear in Chinese customs data. It was the first month of exports since December 2020.
In the weeks after China lifted the unofficial ban on coal, traders initially sent small shipments to test whether customs would clear coal cargoes.
“Any step towards resolving the trade impediments is welcome,” Farrell said on Wednesday.
Chinese customs data showed 10kg (22.05 lb) of copper ore and concentrate in the first quarter of this year, roughly the same as 2022. An analyst and second smelter official speculated the copper shipment’s high gold content may have allowed importers to classify the cargo as precious metal.
Should restrictions end, the trade should return to former levels in time, according to Nick Pickens, research director global mining at Wood Mackenzie. China imported just over one million tonnes of copper ore and concentrate from Australia in 2019, according to customs data.
The centre-left Labor government’s push to remove all trade blocks notched another win last month when both countries agreed to resolve within three months a World Trade Organization dispute over Chinese barley tariffs.
Australian trade data showed A$78,000 worth of barley exports to China in January, the first since November 2020.
($1 = 1.4743 Australian dollars)
