SHANGHAI, Jul. 2 (SMM) – According to China Customs, China's refined copper exports in May were 102,000 mt, the highest monthly export level of the year. During the period January to May, China's refined copper exports totaled 157,000 mt, and exceeded 2011's total exports of 156,000 mt. The surge in exports this year was due to several factors. Jiangxi Copper International Trading Company said in early May that large Chinese copper smelters and trading firms had agreed to step up refined copper deliveries to the LME warehouses in May and June, which caused copper stocks at Asian warehouses to rise continuously. In addition, SHFE/LME copper price ratio has remained low since early 2012, incurring losses for importers as high as RMB 4,000/mt. In an attempt to reduce losses triggered by copper concentrate imports and domestic refined copper sales, copper smelters opted to export refined copper. This move actually helps balance supply and demand in international copper markets and helps correct the SHFE/LME copper price ratio. As large quantities of imported refined copper stood idle in Chinese bonded warehouses, re-export demand was robust and also helped contribute to high refined copper imports during May.

There was news in markets recently that a 3% tariff on refined copper processed with imported materials would be cancelled, but another rumor had this 3% tariff levied on the portion of refined copper exported that exceeded regulated amounts. Whichever rumor may be true or even implemented in the future will help drive up refined copper imports.