China imposes informal ban against Australian copper ore and concentrate in November 2020.
Context
On November 2, 2020, the South China Morning Post, reported China’s intention to begin implementing an informal ban on Australian copper, with immediate effect during that week. Australia viewed this as related to the broader tensions between China and Australia in 2020, particularly around the Morrison government’s call for an inquiry into the origins of COVID-19. Two forms of copper were impacted – copper ore, and copper concentrate.
The measure was informal in nature, with no official Chinese measures announced at any stage. Australian media reportedthat “China’s imports of Australian copper concs have almost stopped since December 2020 as domestic buyers shunned Australian cargoes amid concerns around import bans, although Beijing did not release any official documents banning such imports from Australia.” The spokesman of the Ministry of Foreign Affairs claimed that all restrictive measures would be made lawfully under the existing legal framework. Moreover, it was reaffirmed that any measures imposed by China were not driven by political concerns.
Impact
Analysis by Adams and Wicks from the University of Adelaide demonstrates the many methodological challenges of clearly identifying the impact of these measures, with their analysis demonstrating the multiple ways on which it can be calculated – and the difficulties of disentangling the bilateral trading relationship in a particular commodity (and subtypes of that commodity) from broader global dynamics.
As of 2019, Australian copper concentrate exports to China had reached 1.1 million tonnes, a relatively small amount constituting 5% of China’s total imports. Mining.com reported the following statistics (below) showing volumes of Australian copper concentrate exports to China over time, showing that by early 2021, there was little to know export of copper concentrate to China, although overall volumes of Australian exports had not significantly changed.
Reuters notes some discrepancies between trade statistics since the dispute, noting:
“Australian customs records show that Australia also exported to China 10,594 tons of copper concentrate in September 2022 and 10,934 tons in January 2023.”
“Chinese customs do not show any imports from Australia of more than a few kilograms since June 2021, when 11,404 tons was recorded as entering from Australia, according to data accessed using Trade Data Monitor.”
A Chinese business data intelligence firm disclosed that, since 2021, Australia was officially no longer one of China’s major import countries for copper ore. However, experts suggested at the time that this informal ban would have limited impact, because of the widespread availability of alternative markets for both Australian exporters and Chinese importers, and because of “robust copper prices”.
Responses
i) Australian Industry
Australian copper firm Sandfire Resources Ltd CEO Karl Smit responded by telling the press that “if it turns out that the Chinese don’t buy it (copper concentrate), and are told not to buy it, all that will happen is that the Koreans, Japanese and Taiwanese will buy it all anyway, so it makes no difference”. But the same CEO also conceded that “[t]he reason why we sell to China is they pay, at the margin, a fraction more because they’re always happy to overbid the Japanese and Koreans.” In January 2021 the AFR claimed that Australian firms are “having no trouble finding willing buyers”.
(ii) Australian Government
Australian Prime Minister Scott Morrison was defiant in the face of this and other similarly-timed Weaponised Trade measures – and the simultaneous release of Beijing’s so-called list of 14 grievances – stating that Australia “will always set our own laws and our own rules according to our national interests – not at the behest of any other nation, whether that’s the US or China or anyone else.”
(iii) Other Parties
Swiss commodity trader Trafigura reportedly played a positive role in assisting the resumption of Chinese copper concentrate imports from Australia in November 2023.
Status
In May 2023 Australian Trade Minister Don Farrell visited China in a bid to end all China’s Weaponised Trade restrictions. An anonymous official at a Chinese smelter told press that if this visit was successful then the unofficial copper concentrate import ban would likely be rescinded.
Reports from November 2023 suggested that the informal ban had been eased, with an 11,000 ton shipment of copper concentrate leaving Geraldton for Qingdao on 3 November.
In 2021, Chinese trade data showed that China still imported $30 million of Australian copper concentrate, reportedly because of “[g]lobal supply shortages and political conflict”. Australian customs data also shows exports of over 10,000 tons in September 2022 and January 2023.
References & Further Information
Adams, M and Wicks, R. 2022. “Standing up to Chinese economic coercion: Is Australia a model of economic resilience?” University of Adelaide Institute of International Trade, Working Paper Number 13.
Bloomberg News. 2023. “Australian Copper Ore Heads to China as Relations Thaw.” Bloomberg. November 10. Available at: https://www.bloomberg.com/news/articles/ 2023-11-10/testing-warmer-relations-australian-copper-ore-heads-to-china?embedded-checkout=true
Jackson, L., Liu, S., and Burton, M. 2023. “Australia exports first copper to China since 2020, industry hopes end to ban near.” Reuters. May 10. Available at: https://www. reuters.com/markets/commodities/chinese-buyers-anticipate-end-soft-ban-australian-copper-2023-05-10/
Huaon. 2021. ‘Data analysis of global and Chinese copper productions and market competition in 2021’ [2021年全球及中国铜矿生产现状及竞争格局分析]. May 14. Available at: https://www.huaon.com/channel/trend/804682.html.
Korea Times. 2021. “China’s bid to ‘weaponize trade’ crumbles as it turns to Australia for natural resources.” October 9. Available at: https://www.koreatimes.co.kr/www/ world/2024/05/501_316704.html
Luk, J. 2023. “Trafigura brings Australian mined copper back to China -sources.” Reuters. November 13. Available at: https://www.reuters.com/markets/commodities/ trafigura-brings-australian-mined-copper-back-china-sources-2023-11-13/
Mining.com . 2024. “Australia sends biggest copper concentrate shipment to China since 2020.” Mining.com. January 16. Available at: https://www.mining.com/web/ australia-sends-biggest-copper-concentrate-shipment-to-china-since-2020/
South China Morning Post. 2020. “China-Australia relations: PM Scott Morrison responds to Beijing’s list of 14 grievances.” South China Morning Post. November 19. Available at:https://www.scmp.com/news/asia/australasia/article/3110462/china-australia-relations-pm-scott-morrison-responds-beijings
Tan, S.L. 2021. “China’s bid to ‘weaponise trade’ crumbles as it turns to Australia for cotton, copper despite import ban.” South China Morning Post. October 8. Available at:
Tang, L. & Han, L. 2023. “China signals resumption of Australian copper concentrate imports with one cargo due to arrive.” S&P Global. November 9. Available at: https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/metals/110923-china-signals-resumption-of-australian-copper-concentrate-imports-with-one-cargo-due-to-arrive
Thompson, B. 2021. “Miners sell elsewhere as China shuts door on Aussie copper.” Australian Financial Review. January 21. Available at: https://www.afr.com/politics/ miners-look-elsewhere-as-china-closes-door-on-aussie-copper-20210121-p56vv8
Wilkie, K. 2020. “’ This has big consequences’: Mark McGowan lashes out at Australia’s deteriorating relationship with China after $2million worth of lobster was left to rot and seven more Aussie goods are BANNED.” Daily Mail. November 3. Available at: https://www.dailymail.co.uk/news/article-8910693/Mark-McGowan-lashes-Australias-deteriorating-relationship-China.html