SHANGHAI, May 9 (SMM) –China’s imports of unwrought copper and copper semis fell 33.33% year-on-year to the lowest since October 2016 at 300,000 tonnes in April, and dropped 22.9% year-on-year to 1.45 million tonnes during January-April, customs data showed.
SMM attributes the decline to three factors:
First, base was higher in April 2016. Imports of unwrought copper and copper semis were basically in a downward trend in 2016. Moreover, copper import profit window was closed most of the time during the first four months of this year and opened occasionally in mid and late April, which also contributed to year-on-year drop.
Second, copper import passion cooled down, given no big pick-up in downstream demand and cautious restocking by downstream producers.
Third, copper prices traded at high levels most of the time so far this year and the price spread was large between copper cathode and copper scrap. Copper scrap thus gained more favor, biting into market share of copper cathode. Customs data showed China’s copper scrap imports rose 22.2% year-on-year to 910,000 tonnes in Q1 and surged 61% year-on-year to 273,000 tonnes in February.
Closure of import arbitrage window and uncertainty over exchange rate greatly dampened import activities, Jing Chuan, Deputy General Manager at Zhongda Futures explained. Increased copper output in China could satisfy short-term demand, Jing added. Overall copper consumption in China was stable during the first four months of this year. Falling copper imports will have limited impact on copper prices in China, but will hit international copper prices, Jing noted.
Copper cathode production and processing in China squeezed market share of imported copper semis, Luo Liang, Analyst at SHZQ Futures said. Customs data showed China’s imports of copper ore and concentrate were 1.36 million tonnes in April and grew 8.3% year-on-year to 5.67 million tonnes during January-April.
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