China Cu Import Data Analysis in July

SHAGNHAI, Jul. 25 (SMM) –

Copper concentrate
According to China Customs, China's imports of copper concentrate were 595.2 kt (physical content) in June, up 129.6 kt from May's 465.6 kt. The increases in copper concentrate imports were in line with China's high output during June. High spot copper concentrate TC/RC at around USD 100/mt (cents 10.0/lbs), high demand for raw materials from increased output, as well as a favorable SHFE/LME copper price ratio all helped increase copper smelter interest in importing copper concentrate during June. Despite high TC/RC for copper concentrate, the SHFE/LME copper price ratio has been unfavorable for imports since the beginning of July, so SMM believes that China's imports of copper concentrate in July will fall from June's high levels.    

Refined copper
According to China Customs, China's refined copper imports were 178.6 kt in June, up 29.4 kt from May, and SMM predicted this increase based on higher imports of unwrought copper and copper semis. Speculative activity by traders and downstream producers grew during June as prices rose, keeping prices high within a narrow band compared with previous months. Coupled with a surge in the newly arrived shipments, refined copper imports increased during June. As copper prices moved higher in early July, domestic copper prices followed only passively, causing the SHFE/LME copper price ratio to return a low level around 7.4, which is unfavorable for imports. In this context, SMM believes that there is little chance refined copper imports will grow during July and will remain near 150 kt.   

Copper Semis
According to China Customs, China's imports of copper semis were 66.5 kt in June, up slightly 3 kt from May's 63.5 kt. As imports of copper semis are closely related to the SHFE/LME copper price ratio and copper prices, enthusiasm for importing copper semis increased significantly when copper prices were relatively low and the price ratio was favorable. These factors were behind the increase in imports of copper semis in June, but since the price ratio has recently fallen, copper semis imports will be lower in July.