China's net copper imports last year fell to the lowest level since 2017. They totaled 3.03 million metric tonnes.

Exports grew dramatically, despite a drop in inbound shipments of only 5% compared to 2024. The largest copper buyer in the world shipped almost 800,000 tonnes.

The counter-flow, which was unprecedented in its magnitude, was driven by global dislocation caused by the threat of U.S. tariffs on imports and by the high price for delivery to the United States.

It's also a sign of China's growing processing capacity in the entire base metals spectrum.

According to World Bureau of Metal Statistics which uses data from China's General Administration of Customs, exports of refined Nickel and zinc also reached records.

China's metals trading was once a one way street, but this is changing.

BONDED ROUNDABOUT

The U.S. threat of tariffs on imported refined copper was deferred to June. This opened a gap between the U.S. contract price, represented by the CME, and the international price, traded on the London Metal Exchange.

The arbitrage was exploited by traders who shipped huge quantities of metals to the U.S. from China's warehouse zones.

China's trade statistics show that 203,000 tons of metal left China for the United States in 2013. However, U.S. Customs only registered 17 tons of Chinese imports up until October. This proves that these shipments are non-Chinese branded?metal taken from bonded warehouses.

China's metals industry is a part of its bonded stock system. Chinese customs classifies metal entering these bonded areas as imported material. It is intended to be released into the mainland rather than re-shipped elsewhere.

This dynamic has been changed by the U.S. trade in tariffs. Last year, copper was sent to Germany, Italy, and the Netherlands to replace units, especially Chilean copper that had been redirected towards the United States.

Some Chinese smelters export directly to LME warehouses located in Hong Kong and Taiwan, as LME stocks are equally devoid of brands that qualify for U.S. shipment.

At the end of December, 79% of LME's warranted tonnage was made up of Chinese-brand copper.

The increase in U.S. tariffs on imports to 50%, in June of last year, has also caused global aluminium flow disruptions.

The threat by U.S. president Donald Trump to impose even higher tariffs against?Canada, one of the major suppliers to the U.S. markets, has caused the U.S. price premium to increase to an eye-watering 2,177 dollars per ton above the LME cash basis.

The gravitational pull that copper has on China's bond warehouses is similar to what it was with copper.

Inbound shipments of primary metallic reached almost 300,000 tonnes last year. In the fourth quarter, the main destinations for primary metal were South Korea and India.

China was a net consumer of primary aluminum last year. However, its exports have reduced the net demand for metals from other countries.

Shipping is a major factor in determining the price of a product.

China also increased exports of zinc and tin in response to recent price increases on the LME.

After a brutal squeeze on the LME contract, in October, the country became a net exporter in November and December.

In the fourth quarter, outbound shipments totaled 78.500 tons. Taiwan, Singapore, and Hong Kong are the top three destinations, as they all host LME storage facilities.

Exports of refined Tin accelerated to nearly 3,000 tons during the same period that the LME tin contract went on a frantic rally.

In fact, China exported soldering metal in net quantities for the first year since 2021 when the Western market was affected by the closure of multiple smelters due to COVID-19.

China's growing dominance in global smelting is reflected in both cases. In tin, this has been true for a long time. However, it is a relatively new phenomenon in zinc. This is due to China's recent aggressive expansion of its processing capacity.

NICKEL TWO-WAY TRAFFIC

China has also expanded its nickel-processing capacity by sourcing raw materials in the booming nickel industry of Indonesia.

As Chinese automakers pivot towards non-nickel batteries, what was meant to feed demand for the electric vehicle battery sector is now increasingly finding its way into LME warehouses.

Chinese refined nickel exports jumped 40% on the year to 171,000 tonnes, a record. Exports have pushed LME warehouse inventories to record highs, with Chinese brands accounting for?69% at the end 2025.

Contrary to expectations, Chinese imports increased even more rapidly, reaching 231,000 tons. This is the highest total since 2021.

It is clear that, while Chinese commercial entities were importing metal from Russia and Norway, they also added to their strategic reserves.

China's refined Nickel trade was largely a one-way street until mid-2024 when a new refinery generation entered production and began?listing brands on the LME.

The same can be said for almost every base metal, with the exception that aluminium is a market that has been dominated by China. China exports its domestic surplus as semi-manufactured goods rather than primary metal.

Two-way traffic is set to be the new norm as the country looks to replicate its dominance of aluminium in other base metals.

Andy Home is a journalist. His opinions are his. You like this column? Open Interest (ROI), a data-driven, thought-provoking commentary on the markets and finance is available. Follow ROI on LinkedIn, X and X.

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(source: Reuters)