China to face decline in copper imports for the next year as the response of its weak domestic demand on copper  driven by slowing economy in the country. China released weaker than expected economic data that raised serious concerns over the country's future demand for industrial metal.

China's copper import will shrink 10% in 2016 as consumption weakens, domestic supplies increase and less metal is used for collateral in financing, said CEO of trading house Arc Resource Co. Stephen Huang as reported on Bloomberg.

The chief executive of one of China's largest buyers stated that there will be a substantial change in sourcing structure next year as users buy more from domestic producers and less from foreign suplliers. Arc Resource handles about one tenth of the country's copper imports. The company was established in 2010 and its sales last year were $7.9 billion, dropped from 2013 sales of $9.3 billion.

Copper purchases in China have already dropped up to 4% to 2.55 million metric tons in the first three quarters of 2015 compared to purchases a year earlier. According to The Wall Street Journals, China accounts for 40% of the world's copper demands. The country's economy slowed to a growth rate of 6.9% in the third quarter, the slowest rate since the financial crisis.

China is facing the economic slowdown as President Xi Jinping steers the country to a growth model based on consumer demand and services rather than state investment spending. The economic slowdown has impacted the drop down on overall consumption pattern. Industrial production has dropped more than 20% since May 2015 and it impacted the lower copper consumption.

Meanwhile, Copper prices fell to their lowest level in more than six years as China's economy weakened. According to China Business News, copper prices on Bloomberg Commodities Index dropped 0.71% to $215.70. Copper futures dropped by 2.1% to $2.1725 on New York Merchantile Exchange.

Chinese traders will also probably import less copper next year under long term contracts due to high premium  rates charged by suppliers. The top suppliers including Chile's Codelco charge buyers a premium above London Metal Exchange prices. Codelco's fee was $133 a ton for 2015, while Japan's Pan Pacific Copper Co. agreed to cut 8.7% of its previous fee to $105 a ton. The spot premium in warehouse zone in Shanghai has averaged $77 this year.

Analysts believe that copper prices will continue to fall in the next year driven by weak economic data. While Arc Resource believes that copper demand will probably slow down to about 2% annually in the next few years.