SHANGHAI, Mar. 4 (SMM) –

Copper Concentrate
According to China Customs, China's copper concentrate imports during January were 761,100 mt (physical content), up 26.65% YoY, but down 174,000 mt MoM. When TC/RC for 2012 long-term copper concentrate was around USD 60/mt, Chinese copper smelters could barely make any profits, so smelters significantly cut copper concentrate imports during January to win more favorable terms during TC/RC negotiations. Copper smelters had expressed great interest in importing copper concentrate during 2H 2012 since they had to fulfill 2012 long-term contracts and since TC/RC had remained high throughout this period. Against this backdrop, copper concentrate imports reached their highest level in December 2012, making January's MoM drop even more pronounced.

Despite the lack of import profits, copper smelters will continue to need a large supply of overseas copper concentrate once their existing stocks are gradually consumed. Therefore, SMM expects that copper concentrate imports will increase gradually in 1Q 2013.

Refined Copper
According to China Customs, China's refined copper imports during January were 243,200 mt, up 1.82% MoM, but down 27.51% YoY. New L/C quotes were opened during January, which resulted in increased financing demand and caused a MoM rise in refined copper imports. However, overall market dependence on using copper as a financing vehicle was down since domestic cash flows improved noticeably. The Chinese government has also tightened restrictions on L/C use since 2H 2012, causing refined copper imports to experience a 30% YoY decline during January 2013. Copper stocks in Chinese bonded areas surged for a prolonged periods during 2012, driven by copper demand for financing purposes, heightening domestic refined copper supply pressure. The YoY drop in January's refined copper imports should help alleviate high copper stocks in bonded zones, with apparent consumption of refined copper also expected to return to normal levels.

Copper Semis
According to China Customs, China's copper semis imports during January were 53,600 mt, down 2.7% MoM, but up 20.9% YoY. Copper semis imports fell slightly in January on a monthly basis, but still extended upward momentum from November if copper alloy imports are considered. As China's domestic copper semis production technology develops, China's copper semis imports fall year by year, but are still used to meet export demand for high value-added products. With overseas consumer markets recovering slowly, China's export environment has also improved, which in turn continues to boost demand for imported copper semis.