U.S. imports of copper fell to a one-year low in August, snapping a string of four consecutive monthly increases, while inbound shipments of aluminum slumped to their lowest in two years, both reflective of a decelerating economy.
That deceleration should prompt the U.S. Federal Reserve to move faster in its efforts to stimulate the economy, which in turn, should boost consumption levels of these industrial metals in the months ahead, analysts said.
Data from the U.S. International Trade Commission on Thursday showed August copper imports fell sharply to 37,694 tonnes, down over 40 percent from 66,008 tonnes registered in July.
August copper imports stood at their lowest level since August 2009, when 36,426 tonnes were shipped into the country.
Inbound shipments of aluminum declined to 102,049 tonnes, their weakest since August 2008
The drop-off in August imports reflected a greater slowdown in metal-intensive industries such as the construction and automotive sectors, which have struggled to fully recover from the worst recession since the Great Depression, analysts said.
"It shows a decelerating economy," Shawn Hackett, president of Hackett Financial Advisors, Inc., said of the declining import levels.
"That would suggest we will need less metal. I don't know of too many industries that are booming right now," he said.
Indeed, an oversupply of homes has kept a lid on new U.S. home construction, where an average single-family home uses 439 lbs of copper, according to the Copper Development Association.
"You're not going to be using a lot of copper in home construction with 300,000 to 500,000 homes being built a year right now," one physical dealer said.
Additionally, a slow-motion recovery in the U.S. automobile industry has produced wild fluctuations in aluminum shipments this year.
U.S. auto sales slipped 4 percent in September from August, but were up nearly 29 percent from year-ago levels.All this suggests that the Fed will need to act sooner, rather than later.
U.S. Fed Chairman Ben Bernanke said on Friday that high unemployment and low inflation point to a need for a further easing of U.S. monetary policy, but he offered no details on the central bank's next step.
"If the Fed does what they say they are going to do, we'll get another blip … another temporary surge in the economy, so I would imagine that the （import） numbers will look a little better in the months ahead," Hackett said.
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