SHANGHAI, Oct. 22 (SMM) –According to China Customs, China's imports of unwrought copper and copper semis in September were 395,000 mt, up 11.0% MoM and 3.8% YoY. SMM estimates China's refined copper imports should be around 280,000 mt for September, exceeding 250,000 mt for a third consecutive month.
SMM believes the increase in copper imports during September is due to the following factors. First, losses for imported copper remained below RMB 1,000/mt during mid-August to early September, helping boost imported copper arrivals at Chinese ports during September. Second, some imported copper contract supply arrived at Chinese ports ahead of scheduled due to the Chinese National Day holiday. Third, the RMB:USD exchange rate rose by 1% during September, and markets expected the RMB to appreciate further.
Nevertheless, SMM finds actual domestic copper consumption failed to improve appreciably during September since the average operating rate at copper semis producers was still below 70%. Since actual consumption was limited, spot premiums for imported copper have fallen, with premiums for high-quality imported copper only USD 60/mt at present. Coupled with increasing supply, copper stocks at bonded warehouses rose above 600,000 mt during October, which will dampen future price increases.