METALS DATA - China's copper metal imports up 20 pct on-year in May; exports surge

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Vivian Teovivian.teo@fastmarkets.comJoint News Editor - Asia

Singapore 21/06/2016 - China’s import of unwrought copper and copper alloy rose 20.1 percent year-on-year but fell five percent month-on-month to 380,000 tonnes in May, according to final trade data released by the country’s General Administration of Customs on Tuesday.

This took year-to-May imports to 2.09 million tonnes, which was up 25.8 percent from the same period last year.

Imports in the first quarter had been strong due to earlier arbitrage opportunities between Shanghai Futures Exchange and London Metal Exchange, opportunistic buying when copper was at low prices and restocking ahead of the peak demand season of April-May.

Market participants had expected imports to slow after March as the arb opportunity has closed since late-January – SHFE copper inventory has declined for six consecutive weeks between May 9 and June 17.

Industry watchers are looking out for arb opportunities again after the Shanghai price closed between parity and a small premium to the LME (plus logistical premiums) early last week following a large drop in LME copper price.

Should the arb ratio continue higher, Chinese imports and demand are likely to increase, traders said.

But since last Wednesday, the arb has stayed closed based on a cost, insurance and freight (CIF) premium in Shanghai of $50.

Meanwhile, China’s export of unwrought copper and copper alloy surged 3.5-fold year-on-year to 84,984 tonnes in May. Year-to-date exports rose 48.3 percent to 163,197 tonnes.

Chinese copper smelters had continued to deliver metal into London Metal Exchange-registered warehouses in Southeast Asia – an activity that had started since late-March – on attractive warehouse incentives and lacklustre physical market.

Additionally, Chinese copper scrap imports slipped 4.4 percent year-on-year to 270,000 tonnes in May, which took year-to-date imports to 1.29 million tonnes. This is down 6.5 percent from the same period last year.

China's copper ore and concentrate imports increased 47.2 percent year-on-year to 1.43 million tonnes in May. Imports rose 34 percent year-on-year to 6.69 million tonnes in the first five months of the year.



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