Copper Imports by China May Fall 16%, Analyst Says (Update1)

March 9 (Bloomberg) -- China's net imports of refined copper may fall 16 percent this year as manufacturers run down stockpiles and domestic production increases, an analyst at Shanghai Nonferrous Metals, said.

Net inbound shipments may fall to 2.6 million metric tons, said Zhou Qian in an interview at a Nanjing conference today. Real demand may grow 14 percent to 7.55 million tons, he said.

Inbound shipments of refined copper fell for the first time in three months in January as domestic supplies increased and seasonal demand slowed. The country has been running down stockpiles in bonded warehouses, Macquarie Group Ltd. has said. Traders store shipments in a bonded zone before paying duties.

"Downstream demand is expected to be quite strong from real estate and transport industries in 2010, and still grow modestly from the home appliance sector," Li Lan, a researcher at Beijing General Research Institute of Mining and Metallurgy, said in Nanjing. In addition, "demand from electronics makers may increase too as exports improve."

A steeper fall in imports may be avoided by firm demand and as scrap supplies fail to return to levels before the financial crisis, said Zhou. Buyers may run down stockpiles by about 350,000 tons this year, he said, without giving figures for total current inventories. Shanghai Nonferrous is a unit of CBI China Co. China may produce 4.6 million tons of copper in 2010, up 12 percent from an estimated 4.11 million tons last year, Zhou said.

Prices Double

China's copper imports drove prices up 140 percent last year. The country's imports of refined copper are expected to halve to 1.5 million to 1.6 million tons this year from a record in 2009 as the government rolls back stimulus spending and curbs credit growth, Xi'an Maike Metal International Group and China Minmetals Nonferrous Metals Co. have said.

The June-delivery contract on the Shanghai Futures Exchange fell 0.7 percent to 60,270 yuan ($8,829) a ton. Copper for three-month delivery on the London Metal Exchange increased 0.4 percent to $7,503 a ton by 4:15 p.m. in Shanghai.

Qu Yi, an analyst at CRU Group Ltd., also forecast net imports at about 2.6 million tons in an interview today.