Why China Refined Copper Imports Surge 46% MoM in November after Hitting 3-1/2-year Low in October? SMM Reports

SHANGHAI, Dec. 23 (SMM) – China imported 276,730 tonnes of refined copper in November, down 22.9 percent year-on-year, but up 46 percent month-on-month, narrowing the scissors gap of year-on-year imports since this July, according to China Customs, with YTD imports up 0.44 percent to 3,269,273 tonnes. 

China’s refined copper imports had been falling since this March as the profitable import window has been closed for most of the year, and imports in October even tumbled to a 3-1/2-year low. 

Why China refined copper imports surge on a monthly basis in November after October’s low levels?  

SMM contributes the month-on-month surge in November to the following factors. 

First, foreign smelters and traders held back goods to support spot premiums to gain bargaining chip during the annual term contracts negotiations, and after the talks, their supplies returned to normal. 

Second, importers had been actively importing goods due to expectations of yuan’s further devaluation, which may expand import losses. Devaluation in the Chinese yuan has accelerated after its inclusion in the Special Drawing Right (SDR) October 1.

Third, producers and traders stepped up imports at the year’s end out of credit extension consideration at banks next year, though import window remained closed most of this year, SMM added.

Fourth, copper imports had arbitrage opportunity at one point in October

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