China Scrap Copper Imports Fall Sharply in June-Shanghai Metals Market

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China Scrap Copper Imports Fall Sharply in June

Data Analysis 01:15:27PM Jul 16, 2012 Source:SMM

SHANGHAI, Jul. 16 (SMM) – According to China Customs, China's scrap copper imports during June were 370,000 mt, down sharply by 12.71% MoM and 12.27% YoY. The sharp drop in scrap copper imports was in line with SMM's expectations now that importers only replenished scrap copper stocks as needed given the unfavorable SHFE/LME copper price ratio and copper's relatively high absolute prices. Although an import window opened in May and propelled importers to increase purchase volumes, these goods will only arrive at Chinese ports during July. In SMM's view, since the SHFE/LME copper price ratio rose significantly in May and since falling copper prices also reduced the risk of purchase, domestic scrap copper importers began to gradually increase orders. In this context, SMM believes China's scrap copper imports will rebound slightly during July and August, helping ease domestic supply shortages. Since imports will not completely ease this year's shortages, the price gap between scrap and refined copper should remain between RMB 800-1,200/mt for the foreseeable future.


 

China Scrap Copper Imports Fall Sharply in June

Data Analysis 01:15:27PM Jul 16, 2012 Source:SMM

SHANGHAI, Jul. 16 (SMM) – According to China Customs, China's scrap copper imports during June were 370,000 mt, down sharply by 12.71% MoM and 12.27% YoY. The sharp drop in scrap copper imports was in line with SMM's expectations now that importers only replenished scrap copper stocks as needed given the unfavorable SHFE/LME copper price ratio and copper's relatively high absolute prices. Although an import window opened in May and propelled importers to increase purchase volumes, these goods will only arrive at Chinese ports during July. In SMM's view, since the SHFE/LME copper price ratio rose significantly in May and since falling copper prices also reduced the risk of purchase, domestic scrap copper importers began to gradually increase orders. In this context, SMM believes China's scrap copper imports will rebound slightly during July and August, helping ease domestic supply shortages. Since imports will not completely ease this year's shortages, the price gap between scrap and refined copper should remain between RMB 800-1,200/mt for the foreseeable future.