CHINA June 24 2014 10:55 AM SHANGHAI (Scrap Register): Chinese copper imports fell in May but the factors impacting this have reversed in June, said Citi Research.
According to Citi, Chinese refined copper and copper scrap imports in May fell by a seasonally adjusted 15% and 26% month-on-month, respectively. Weak imports were partly caused by the very weak arb in March -- imports generally respond on a two month lag -- as well as declining end-user demand reflected in lower fabricator utilization rates.
"Scrap demand was likely also hit by a compression of the spread between refined and scrap copper prices. However, many of these factors have since reversed with the result being a loosening domestic copper market. The import arb has improved notably, bouncing around neutral -- an attractive opportunity for those financing metal imports," said the firm.
"Spreads between refined and scrap copper have also widened, encouraging greater scrap imports. Production at a number of refineries that had experienced problems has either recently been restored or will be within the next two weeks," Citi added.