BEIJING, Mar. 22 -- Refined copper imports by China, the largest consumer, advanced 12 percent in February from a month earlier as demand improved and scrap supply fell.
Inbound shipments were 220,530 metric tons, the Beijing- based customs office said today. That's up from 196,926 tons in January and was down 19 percent from the same month last year, according to data compiled by Bloomberg.
Chinese after-tax copper prices have traded at a premium to those in London for most of this year, according to Bloomberg calculations. The premium was about 500 yuan ($73) a ton on March 19, down from this year's high of 3,000 yuan in February.
The increase in imports is "no surprise given the favorable arbitrage," Ji Guoqin, an analyst at Zhejiang Zhongda Futures Co., said from Hangzhou. "A continuing shortage of scrap meant more demand for the refined metal," he said.
China imported 276,634 tons of scrap copper in February, customs said today, down from 337,443 tons the month before.
Copper purchases may rebound as China runs down inventories in bonded warehouses, commodity researcher CBI China Co. said last month. Traders store shipments in a bonded zone before paying duties to the government.
The June-delivery contract on the Shanghai Futures Exchange declined 1 percent to 59,610 yuan ($8,732) a ton at midday. Copper for three-month delivery on the London Metal Exchange was little changed at $7,440 a ton at 1:06 p.m. Shanghai time.
Metal Imports Slump
China's imports of aluminum, lead, zinc and nickel all decreased from a month earlier, customs data show. Shipments of primary aluminum and refined zinc plunged 52 percent, lead tumbled 73 percent and nickel dropped 25 percent.
"Pressure from a domestic supply surplus remains evident," Yang Yongbin, an analyst at HNA Topwin Futures Co. in Shanghai, said today, referring to aluminum.
Arbitrage is where investors seek to profit from price disparities for the same asset in different markets.