SHANGHAI, Jul. 25 (SMM) – China’s scrap copper imports plunged by 13.1% on the month to merely 263,000 tonnes in June, below the average monthly volume through the first six months, Customs data indicate.
Meager profit for scrap traders and sizable copper concentrate stocks at copper smelters are blamed for the slumping imports, SMM believes.
Chinese traders reported thin margins from scrap copper imports as foreign scrap yards quoted high and scrap prices in China remained comparatively low. Most traders only imported to fulfill long-term contracts or based on orders placed by downstream buyers.
Chinese copper smelters also cut scrap purchases from physical markets as they stored up large amounts of copper concentrate incentivized by high spot TCs.
The tight mid-year liquidity and the fear a potential copper price pullback in offseason also weakened appetite for scrap copper imports.
The import volume for June was also 21.8% lower than the same period last year. Imports through the first half of the year fell by 14.8% from a year ago to 1.76 million tonnes, China Customs said.
The higher temperatures in June and July may impede dismantling of certain kinds of scraps, such as waste motors, which will undermine buying interest at Chinese scrap traders. However, SMM expects a rebound in scrap copper imports to roughly 300,000 tonnes in July as the SHFE/LME copper price ratio started recovering in May.