Chinese state-owned researcher Beijing Antaike Information Development Co has said that copper imports into China may fall by as much as 32 per cent this year.
The company told Bloomberg that this was because stockpiles in the country are above average levels.
Antaike copper analysts Li Yusheng said: “We have cut our forecast from 2.4 million tonnes made at the beginning of this year, to 2 million tonnes. We think the destocking will continue. Imports failed to climb in a pickup of seasonal demand in April and May, and this isn’t a good sign. We think inventories at bonded and exchange warehouses can be tapped to meet the demand in the fall.”
He added that stockpiles of refined copper at bonded warehouses in Shanghai have fallen to about 400,000 tonnes from as much as 600,000 tonnes two months ago. The historical average is 200,000 tonnes.
As scrap-ex news reported yesterday, imports of scrap copper actually increased last month as it appears that stocks of scrap material have been dwindling, even if the Chinese market thinks the price is too high.
Guangdong Qinqyuan general manager Tao Yonghe said: “Scrap imports are too expensive, almost close to the refined price, so traders are reluctant to import.”
With copper scrap accounting for 35 per cent of China’s refined copper output, and 60 per cent of this supply coming from imports, Chinese traders may have no choice but to come back into the market even at these high prices, especially with additional demand from Japan for the material due to reconstruction efforts following the earthquake.
However, with copper currently trading at around the $9,000 mark compared to $10,190 in February, it could be that Chinese importers have taken advantage of prices being a little lower, before they rise again later this year as Japanese demand increases and Chinese scrap stocks get even lower.