SHANGHAI, Dec. 13 (SMM) –
According to China Customs, China’s imports of scrap copper were 400 kt in November, up 29% or 90 kt MoM. YTD imports from January to November were 3.93 million mt, up 10.6% YoY. After China reported low imports of scrap copper in October due mainly to the unfavorable SHFE/LME copper price ratio, scrap copper imports in November returned to average levels last seen two months ago. According to SMM’s break-even model for scrap copper imports, the ratio was favorable for imports during parts of September, with many November arrivals ordered during September based on SMM’s survey.
The SHFE/LME copper price ratio deteriorated further in December according to SMM’s model, and traders told SMM that imports were at a standstill and that arrivals in January and February 2011 would be down significantly. SMM believes that China’s imports of scrap copper will be lower in December compared to November levels due to lower demand during the period of power restrictions in October and from the unfavorable price ratio.
According to China Customs, China’s imports of unwrought copper and copper semis were 351.6 kt in November, up 78.1 kt, or 28.55% from October’s 273.5 kt, and up 21.17% YoY. The SHFE/LME copper price ratio was generally in the 7.4-7.5 range during November, but rose above 7.7 for several days, creating opportunities for imports. In addition, the round of price corrections in mid-November stimulated bargain hunting, which also contributed to higher November imports. As the year end approaches, SMM believes December imports of unwrought copper and copper semis will be over 300 kt due to the year-end deadline and the need to generate cash flow.
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