Singapore 09/05/2016 - While China’s copper imports had fallen month-on-month in April, imports remained strong on a seasonal basis and should stay so in the coming months, ANZ Research said in a Monday report.
China’s imports of unwrought copper and copper products totalled 450,000 tonnes in April, down 21.8 percent from March’s record high of 575,650 tonnes, data from the Chinese customs showed on Sunday.
The latest April figure is up five percent compared with the same month last year, according to ANZ.
Imports have been strong this year on opportunistic buying and attractive arbitrage between Shanghai Futures Exchange and London Metal Exchanges, the bank said. Chinese copper imports rose 23.1 percent year-on-year to 1.88 million tonnes in January-April.
The spread between the two exchanges was negative in March at around $50-60 per tonne, reducing the appeal of arbitrage, but this has currently narrowed to around $30 per tonne, which should help support import demand in May, said ANZ.
Chinese copper imports should also receive a boost from strong consumer demand on restocking for the peak demand season, it added.
On Chinese aluminium exports, ANZ reckoned the decline in exports in April was likely an anomaly.
Stronger domestic prices may have driven the decline in exports with the SHFE-LME spread narrowing to $145 per tonne, from $267 per tonne in February, it said.
“However, with approximately three million tonnes of [aluminium smelting] capacity due to come online in China during the remainder of 2016, exports are likely to remain elevated unless domestic consumptions picks up noticeably. As it stands, year-to-date apparent consumption in China is down five percent year-on-year,” the bank said.
China’s unwrought aluminium and aluminium product exports dipped 4.8 percent month-on-month to 400,000 tonnes in April. The April figure is down 8.3 percent year-on-year, according to ANZ. This is compared to a 15.9 percent year-on-year increase in March.
The latest April number took exports to 1.48 million tonnes in the first four months of the year, which was down 10.2 percent compared to the same period last year.