Copper Snaps Three-Day Winning Streak on Seasonal Slowdown

BEIJING, July 23&nbsp;-- Refined copper imports by China, the world's largest consumer, climbed to a record in June as investment growth spurred demand and traders stockpiled the metal on bets prices will gain.
&nbsp;&nbsp;&nbsp; Inbound shipments increased 12 percent from the previous month to 378,943 metric tons, the Beijing-based customs office said, citing revised final data. Imports were 337,230 tons in May, according to customs.
&nbsp;&nbsp;&nbsp; China's manufacturing expanded for a fourth month in June as a 4 trillion yuan ($585 billion) government stimulus package and record bank lending revived the world's third-largest economy. Inflation concerns and economic growth of 7.9 percent in the second quarter also boosted demand for commodities.
&nbsp;&nbsp;&nbsp; &quot;Copper imports were slightly higher than we had expected,&quot; Zhu Bin, president of futures research at Nanhua Futures Co., said by phone from Hangzhou today. &quot;Traders have sufficient cash flow to stockpile the metal on expectations the metal price will gain further.&quot;
&nbsp;&nbsp;&nbsp; Copper has gained 80 percent on the Shanghai Futures Exchange this year, and closed at 43,000 yuan ($6,295) a ton today. On the London Metal Exchange, the metal has gained 76 percent in the same period.
&nbsp;&nbsp;&nbsp; &quot;Chinese copper imports will gradually decline from July, as the price difference between Shanghai and London has narrowed,&quot; Zhu said. &quot;Domestic demand is not very optimistic now, and most imports were stockpiled in warehouses.&quot;
&nbsp;&nbsp;&nbsp; Premium Falls 
&nbsp;&nbsp;&nbsp; The premium of Shanghai copper over London prices fell below zero at the end of June, from a peak of more than 3,000 yuan in April, according to data compiled by Bloomberg. Higher domestic Chinese prices boosted the appeal of foreign shipments, which together with state buying spurred imports to a record.
&nbsp;&nbsp;&nbsp; The State Reserve Bureau contracted to take between 300,000 tons and 400,000 tons of refined copper into its stockpiles from overseas this year, according to Macquarie Group Ltd. analysts.
&nbsp;&nbsp;&nbsp; Still, traders are unwilling to sell the metal when prices are lower because they expect prices to rise as inflation concerns increase and economic growth accelerates, Zhu said.
&nbsp;&nbsp;&nbsp; Primary aluminum imports were 267,861 tons in June, 3.4 percent higher than May, customs data showed.
&nbsp;&nbsp;&nbsp; &quot;Even though it has been unprofitable to import aluminum since end-May, traders are not worried and they believe the metal price will catch up with gains by copper and other metals over the rest of the year,&quot; said Zhou Weijiang, analyst at Galaxy Futures Broker Co. by phone from Beijing today.
&nbsp;&nbsp;&nbsp; Improving physical demand from auto makers and real estate developers also boosted traders' confidence to hoard the metal for now and sell when the price jumps, Zhou said.
&nbsp;&nbsp;&nbsp; In other metals, inbound shipments of refined lead were 17,512 tons and refined zinc imports were 67,002 tons, according to customs.
&nbsp;&nbsp;&nbsp; (Source: Bloomberg)
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