China's imports of unwrought copper and semi-finished copper products may drop for the second straight month in August following increased inventories from record imports in the first half.
Increased inventories in China had kept domestic prices below the cost of imports for much of last month, cutting margin-driven spot buying by merchants and speculators in China, the world's top consumer of the metal and driver for the rise on the London Metal Exchange copper prices this year.
Supplies of scrap in China had also risen after the Guangdong customs speeds up processing of tens of thousands of tons of copper scrap that had piled up in ports in May-July, reducing demand for refined copper as a replacement for scrap.
Refined copper inflows, taking up 72 percent of July's total copper imports, are expected to fall to between 200,000 and 250,000 tons in August, a drop of 14.4-31.6 percent from the previous month. July's imports dropped by 23 percent from June's all-time record.
Based on the expected fall for refined copper, Friday's data may see total imports at between 278,123 and 348,060 tons of unwrought copper and semi-finished copper products. July's imports were 406,612 tons, down nearly 15 percent from June's record.
The customs will release August figures around Sept 11, but the inflow of refined copper, the most popular type of the metal on international and Chinese markets, will only be released in late September.
"August's imports should fall from July," Zhu Yanzhong, analyst at Jinrui Futures, a subsidiary of Jiangxi Copper, said. "End users increased purchases of scrap, which replaced some demand for refined copper," Zhu added.
Imports of refined copper may fall by 40,000-50,000 ton in August from July, while a manager at a large trading firm said arrivals of term copper should have supported the inflows at the relative high 250,000 tons level.
He said Chinese buyers had asked overseas suppliers to delay contracted shipments since August and that would cut the arrivals in September and onwards.
(China Daily September 8, 2009)
