Singapore 13/07/2016 - China's copper metal imports declined on a month-on-month basis for the third straight month in June, with the trend likely to continue in the near term, market participants said.
Chinese imports of unwrought copper and copper products fell 1.7 percent month-on-month to 420,000 tonnes in June, according to preliminary data published by the country's General Administration of Customs on Wednesday.
The drop reflecs the closed import arbitrage window between the Shanghai Futures Exchange and the London Metal Exchange since late in January, and also slower demand since the off-peak season started in June, sources said. The summer lull in China usually lasts till August.
"There is not much room to import copper given that it remains a loss to do so. Import trading has almost dried up," a Shanghai-based copper analyst said.
"Imports should continue to decline, especially with the start of the non-peak demand season. Also, with the start of summer holidays overseas, trading activity should slow down further," he added.
The recent floods in China are believed to have affected many in the production chain, which "will further affect copper metal demand in the near-term", a Shanghai-based trader said.
Heavy rains and floods in central, southern and eastern China have forced some downstream copper fabricators to shutter production, sources said.
On a year-on-year basis, however, Chinese copper imports remained strong - they are up 20.3 percent, ANZ Research said in a report on Wednesday.
Chinese copper imports rose 22 percent year-on-year to 2.74 million tonnes in the first six months of the year, driven by strong imports until March because of earlier arbitrage opportunities.
(Editing by Mark Shaw)