SHANGHAI, Apr. 8 (SMM) – China imported 380,000 mt of unwrought copper and copper semis during February, down 29.71% from January’s level, and matching the previous SMM estimate. The decline in imports was due mainly to goods shipped to China earlier than scheduled due to the Chinese New Year holiday, which added to January imports, but caused February volumes to fall.

The total volume of imports during the first two months of 2013 grew by 41.2% YoY, to 916,500 mt, a new record high and a sign that markets were concerned over liquidity conditions in the coming year. The surge in copper imports early in the year was considered the result of tighter control over the issuance of L/Cs and an increase in term shipment bookings. However, since most copper financing deals were made for arbitrage trading based on interest rate spreads or for lowering capital costs, traders are becoming more wary of risks arising from volatile prices. In this context, the recent decline in copper prices has increased concerns over higher risks associated with the copper financing trade. In addition, some enterprises now intend to control the proportion of copper financing after the State Administration of Foreign Exchange introduced new regulations last year, fearing that cash squeezes may result from changing policies regarding copper financing. The combination of these factors leads SMM to believe that copper imports will taper off later this year.