China Copper Imports Up 11% MoM, But Actual Consumption Little Improved

SHANGHAI, Oct. 16 (SMM) – According to China Customs, China's imports of unwrought copper and copper semis were 395,000 mt in September, up 11.0% MoM and 3.8% YoY. SMM thus estimates China's refined copper imports should be around 280,000 mt in September, increasing above the 250,000 mt level in three consecutive months.

SMM contributes the increase in September's copper imports to the following factors. First, losses on imported copper remained below RMB 1,000/mt some time from mid-August to early September when copper prices did not surge, helping imported copper arrive at Chinese ports during September. Second, some imported copper contracts arrived at ports ahead of scheduled time owing to the long China's National Day holiday to avert concerns on customs clearance. Third, the RMB:USD exchange rate rose by 1% during September, and markets expected the RMB to appreciate further in the future.

Nevertheless, SMM notes that actual domestic copper consumption failed to improve appreciably in September as the average operating rate at copper semis producers was still below 70%. As improvement in actual consumption was limited, spot premiums for imported copper have slipped all the way, with those for high-quality imported copper barely maintaining USD 60/mt at present. Coupled with increasing supply, copper stocks at bonded warehouses already climbed above 600,000 mt during October. Markets should eye the impact of rising copper stocks on copper markets.