China Cu Import Data Analysis in July

SHANGHAI, Aug. 29 (SMM) –

Copper Concentrate
According to China Customs, China's imports of copper concentrate during July were 453 kt, down significantly 143 kt from June. 

SMM believes the decline in July's copper concentrate imports was due mainly to the release of June's copper concentrate imports in short period of time, which flooded the market. Long-term contracts for imported copper concentrate 2011 had to be executed within the month of June, while TC/RCs for long-term copper concentrate contracts for 1H 2011 at USD 72/mt (cents 7.2/lbs) had virtually no price advantage compared with spot copper concentrate TC/RCs at USD 100/mt (cents 10.0/lbs). Coupled with an unfavorable SHFE/LME copper price ratio, copper smelters postponed execution of long-term contracts until June.   

Since the start of July, as long-term copper concentrate contracts for 2H 2011 were signed at USD 90/mt (cents 9.0/lbs), copper concentrate imports steadily returned around 450 kt.

However, as the SHFE/LME copper price ratio improves in August, it will stimulate copper smelter enthusiasm in importing copper concentrate, so SMM believes imports of copper concentrate will increase in August.

Refined Copper
According to China Customs, China's imports of refined copper were 194 kt in July, up 16 kt from June.

Based on July import data of unwrought copper and copper semis released earlier, imports of refined copper should be around 190 kt, and according to detailed data from China Customs, the main driving force behind increases in unwrought copper and copper semis imports was an increase in refined copper imports. 

Copper prices have been falling steadily since early August, but the slower rate of decline for  SHFE copper prices compared to LME copper improved the SHFE/LME copper price ratio and allowed profits for refined copper imports, which will now increase interest in refined copper. However, since goods arrivals and quotation pricing lag actual market conditions, new goods arriving in August will decline due to impacts from July's high copper prices and the unfavorable price ratio. In this context, SMM believes imports of refined copper during August will fall slightly.

Copper Semis
According to China Customs, China's imports of copper semis were only 66 kt in July, slightly down from June levels. 

SMM believes that high copper prices near USD 10,000/mt, a falling SHFE/LME copper price ratio, and a seasonal low demand period all contributed to lower imported copper semis demand during July. 

Copper semis consumption has not yet recovered and European and US economic uncertainties remain. Coupled with summer holidays, imports of copper terminal products were down, and SMM believes imports of copper semis will not likely increase during August.