Copper Imports by China to Decline on Stockpiles

SHANGHAI, Sept. 28 -- Copper imports by China, the world's largest consumer, will drop as the country works off substantial stockpiles, said a state-owned research company.

    Inbound shipments of refined copper may be 150,000 metric tons per month over the rest of the year. That compares with 219,731 tons in August and is less than half the record 378,943 tons in June, according to data compiled by Bloomberg.

    Copper, used in pipes, wires and power cables, has doubled this year in London as China's 4 trillion yuan ($586 billion) stimulus package and state stockpiling boosted imports to a record and as a recovery in the global economy drove demand.

    The surge in first half imports was "very unusual", said an analyst, who has followed the Chinese copper industry for 20 years. "There're substantial inventories to be worked off before China steps up purchases again."

    The copper surplus in China so far this year may be as much as 1.2 million tons, including the State Reserve Bureau purchases, the analyst said. The bureau buying totaled 235,000 tons, according to a Caijing magazine report.

    Refined copper production in China may climb 4.5 percent to 3.95 million tons this year from 3.78 million tons in 2008 and increase to 4.2 million tons in 2010, he said. Consumption may gain 10 percent this year to as much as 5.4 million tons.

    He expects the London Metal Exchange price to drop as low as $5,000 a ton by the end of the year because of the surplus in China, and the Shanghai price to fall as low as 47,000 yuan a ton. He estimates an average next year of $4,780 to $5,000 a ton on the LME and 47,000 yuan in Shanghai.

    Three-month delivery copper traded at $5,990 a ton at 1:58 p.m. in Beijing today.

    (Source: Bloomberg)