[SMM Analysis] A brief Analysis of the reasons for the sudden increase in Import data of Copper Ore and unwrought Copper in June

SMM7: according to the latest data released by the General Administration of Customs, China imported 656000 tons of unwrought copper and copper materials in June and 436000 tons in May, a month-on-month increase of 50.5 percent and a year-on-year increase of 98.8 percent (see figure 1 below). China imported 1.594 million tons of copper ore and its concentrate in June and 1.69 million tons in May, down 5.7 percent from the previous month and an increase of 8.7 percent over the same period last year.

SMM believes that the month-on-month increase in unwrought copper in June was due to the following reasons:

1: the import window of electrolytic copper opened for a long time in May, and the import profit was high (see figure 2 for details). The import profit in May was more than 250 yuan / ton for a long time, and even reached 640 yuan / ton at the highest. However, affected by factors such as the shipping date, a large number of imported copper was not cleared into the domestic market until June.

In June, the average monthly price of Shanghai Pingshui copper is 69.5 yuan / ton, and that of good copper is 104.5 yuan / ton. In June, the monthly average price of Guangdong Pingshui copper is 179.5 yuan / ton, and the monthly average price of good copper is 204yuan / ton, which is much higher than the long order price. Thus it can be seen that Gaoshengshui is another important reason for importers to increase customs clearance.

In June, the price gap of fine waste widened, maintaining a profit of 1500 yuan / ton for a long time and nearly 2000 yuan / ton at its peak. (see figure 4 for details); and the local market has been able to import in the name of recycled copper since July, so many importers of scrap copper are actively importing in order to digest the import approvals previously obtained.

Looking forward to July, we believe that the import volume of unwrought copper in July will be lower than that in June (the opening time of the import window will be reduced), and the import volume of scrap copper will also decrease month-on-month, but will still increase compared with the same period last year.

However, compared with the surge in electrolytic copper imports, copper concentrate imports were 1.594 million tons in June, which decreased by 5.7% month-on-month, although it increased by 8.7% compared with the same period last year (see figure 5 for details).

The main reason why copper concentrate imports continued to decline month-on-month is that South America is the main source of China's copper concentrate imports, with physical tonnage from Chile and Peru accounting for 54% of China's total copper concentrate imports in May. However, the epidemic situation in the above two countries has been poorly controlled, the operating rate of local mines is not high, even some mines are still being closed, and the port delivery efficiency is inefficient, which are all important factors contributing to the tight supply of copper concentrates. we expect imports of copper concentrates to continue to decline in July.

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