Chinese Refined Copper and Nickel Imports Hit Record in May

BEIJING, June 25 -- China's imports of refined copper hit a record for a fourth straight month in May, but apparent consumption fell 3.5% on the month reflecting increased stocks and signaling lower inflows in coming months.

    Apparent consumption for nickel rose 17.6%, thanks to record imports and a 25%MoM growth in domestic output last month. Imports of primary aluminum fell nearly 30% on the month in May but that pushed down apparent consumption just 1% because of a 14% rise in domestic production.

    Official customs data showed on June 22nd that China, the world's top consumer of many base metals, imported 337,230 tonnes of refined copper in May up by 6% from the previous record of 317,947 tonnes in April and 258% higher than the year earlier figure.

    Traders and analysts said continued arrivals for arbitrage trade that had been booked in March and April drove up inflows in May, even though the arbitrage window closed this month on strong London Metal Exchange prices.

    Mr Zhu Yanzhong an analyst at Jinrui Futures a subsidiary of top copper smelter Jiangxi Copper said "The May imports should be the peak for at least before August given margins have fallen since late May reducing arbitrage bookings."

    He added the May imports should have included some copper for the State Reserves Bureau which had imported refined copper for the past few months and supported the huge inflow.

    Mr Zhu said but inclines in LME copper prices were reducing demand for imports both from merchants and the SRB, adding he expected imports to fall below 300,000 tonnes in June. He also said that "Chinese consumption is not supporting such large imports in coming months."

    Ms Yingxi Yu, Barclays Capital analyst in Singapore said she expected imports to fall and therefore demand numbers to ease.

    (Source: MetalBiz)