China copper imports soar

[] — China’s imports of refined copper bounced back in September, but high import prices are likely to curb further growth in copper imports in October, analysts and traders said on Monday.

China’s September imports of refined copper rose 28.7 percent on the month to 282,828 tonnes, after declining for two straight months following a record high of 378,943 tonnes in June, official customs data showed.

Imports of primary aluminium were steady at 117,004 tonnes. Analysts and traders had initially expected China’s copper imports to fall for a third straight month, but data earlier this month showing imports of unwrought copper and semi-finished copper products rose 23 percent from the previous month to 399,052 tonnes had suggested higher purchases of refined copper.

“Such a craze is unlikely to continue into October, because the current price conditions are unfavourable to the import business,” said Li Rong, an analyst at Great Wall Futures.

“Even though the upward trend in copper prices has not faltered despite growing demand as a result of high imports, the pressure on prices is increasing. Domestic copper prices are likely to lag behind London’s price rally as a result.”

Three-month copper on the London Metal Exchange rose to its 13-month high of $6,710 a tonne, boosted by China’s copper imports data.

Despite the bullish atmosphere in the futures market, some analysts and traders said demand for the industrial metal, used in power and construction industries, has not improved much.

“Some traders had expected to move their refined copper to other markets as the price difference between Shanghai and London was unfavourable to imports, but they ended up selling into the Chinese market because demand was weak elsewhere,” said a Shanghai-based trader.

“The entire world was trying to sell copper to China.”

Traders and analysts are concerned about the real demand in China. “Consumption is just so-so, even though we are still in the high season for copper consumption,” said Zhou Jie, an analyst at Shanghai CIFCO Futures. “But many copper users buy from the physical market to stock up on the metal, out of fear of inflation.”

China’s apparent copper demand grew 21 percent in September from the previous month to 657,312 tonnes, Reuters calculations based on official data show.

Among the other base metals, imports of refined zinc and lead also rose, while nickel imports slowed to 20,491 tonnes from August’s 22,703 tonnes. Imports of refined zinc staged a 17 percent rise from a month earlier to 35,652 tonnes, up 4.78 percent, helping push LME zinc to $2,305 a tonne, its highest in more than 17 months.