Copper Cathode Imports in April Down MoM, Exports Expected to Surge Amid Worsening Price Ratio [SMM Analysis]

According to data from the General Administration of Customs, China imported a total of 1.1906 million mt of refined copper (copper cathode with a copper content >99.9935% and other unwrought copper cathode) from January to April 2024, up 20.44% YoY. In April, imports were 284,000 mt, down 3.91% MoM but up 17.42% YoY. From January to April, China exported a total of 70,400 mt of refined copper (copper cathode with a copper content >99.9935% and other unwrought copper cathode), down 45.4% YoY. In April, exports were 284,000 mt, up 5.46% MoM but down 8.33% YoY.

In terms of imports, the MoM decline in copper cathode imports was observed. Entering mid-to-late April, the SHFE/LME copper price ratio continued to worsen, leading to a decline in cargo imports. However, some imported cargoes arrived in April due to previous profitable price ratios, resulting in only a slight MoM decrease in overall copper cathode imports. YoY, copper cathode imports in April increased as low-price African copper gradually replaced South American registered copper. Despite the less favorable price ratio compared to last year, domestic traders imported large quantities of EQ copper driven by local government subsidies.

In terms of exports, the export window opened in March, prompting major domestic refineries to plan exports. Copper cathode began leaving China in April and is expected to arrive at LME Asian warehouses in late May.

Looking ahead, the worsening SHFE/LME copper price ratio in April, together with weak domestic market demand and low willingness to purchase, has raised concerns among sellers about potential warehouse congestion. This has significantly reduced traders' willingness to purchase. Additionally, the COMEX copper short squeeze led many traders to acquire copper cathode globally for warehouse delivery, which will divert some of China's copper cathode imports. SMM understands that the copper cathode that left China in May is now arriving at LME Asian warehouses, but the incremental volume per batch is limited, offering little boost to the SHFE/LME price ratio.

In terms of exports, the export window further opened in April, and the SHFE/LME copper price ratio worsened, with maximum losses reaching 1,500 yuan/mt. Following the May 15 COMEX squeeze, large traders in China concentrated on acquiring foreign brand warehouse receipts for COMEX delivery, with these shipments expected to leave in June. Overall, exports in May are expected to rise significantly, and exports in June are expected to remain high.