China Cu Import Data Analysis in April (May 28, 2012)

SHANGHAI, May 28 (SMM) –

Copper Concentrate
According to China Customs, China's imports of copper concentrate during April were 475,000 mt (physical content), down 56,000 mt from March, and a result of a poor SHFE/LME copper price ratio and since spot TC/RC of copper concentrate at USD 40/mt (cents 4.0/lb) failed to entice copper smelters. The SHFE/LME copper price ratio has fallen sharply since mid-January, causing heavy losses for copper smelters using imported copper concentrate as raw materials. As a consequence, demand for imported copper concentrate fell significantly, causing April's imports of copper concentrate to fall below last year's monthly average of 533,000 mt.

Refined Copper
According to China Customs, China's imports of refined copper during April were 273,000 mt, down sharply by 73,000 mt from March's level. April's imports of refined copper were not only below the 300,000 mt mark for the first time since last November, but were also relatively low for a seventh consecutive month. Drops in April's refined copper imports were basically in line with market expectations, since four months of heavy losses for imported copper, as well as high copper stocks in Chinese bonded warehouses, gradually weakened financing demand. Market liquidity has improved following the cut of 0.5% in the RRR for Chinese banks, while losses for imported copper have also fallen to RMB 1,500/mt since the SHFE/LME copper price ratio began improving in mid-May. However, overall financing demand is not expected to increase, and combined with sluggish Chinese copper consumption, China's imports of refined copper are likely to fall to around 250,000 mt during May.  

Copper Semis
According to China Customs, China's imports of copper semis during April were 57,000 mt, down 7,000 mt MoM and 19.2% YoY. China's imports of copper semis have remained below the monthly average of 65,000 mt from the first four months of 2012, due partly to the fact that imported copper semis demand was replaced by domestic demand given an unfavorable SHFE/LME copper price ratio. Weak terminal product consumption was also behind a drop in imports of copper semis during April. Consumption has yet to improve noticeably in May, so SMM expects China's imports of copper semis for the month to remain low.