SHANGHAI, Jan 31 (SMM) -  According to the data released by the General Administration of Customs of China, China imported 347,400 mt of copper cathode in December 2022, down 3.06% on the month and 13.13% on the year. The month-on-month decline was attributed to the enduring closure of import window, which caused the imports to be dominated by the delivery of long-term orders. In addition, the efficiency of import customs clearance was low near the year-end, compounded by another outbreak of covid-19 in December.

The total imports of copper cathode in 2022 climbed 6.74% from a year earlier to 3.67 million mt. There are two reasons for the growth. First, the copper cathode consumption in overseas markets began to go down in 2022. Overseas premiums showed an inverted V-shaped trend, allowing more opportunities for import profits. Second, the freight rates contracted with the improvement of global shipping capacity, thus the import of copper was no longer hampered and returned to the level seen before the covid-19 outbreak. 

SMM estimates that the total amount of imported copper cathode in January 2023 will continue to slip to around 290,000 mt, down 16.5% MoM, while the export volume will increase 117% from the previous year to 21,000 mt.

First, the forecast is based on the huge import losses caused by the growing SHFE/LME copper price ratio, which will suppress import demand. At the same time, the export window will be opened, and some smelters will start to ship copper cathode to INE warehouses.

Next, as the logistics is usually impeded during the Chinese New Year (CNY) holiday, some traders or importers will require the overseas suppliers to rearrange shipping schedules to avoid stranded cargoes at the ports. The shipments of cargoes under long-term orders from Chile may be deferred due to sea tide, but the delay will largely affect the imports in February.