China's Copper Imports More Than Double on Building (Update2)
By Xiaowei Li and Xiao Yu
April 23 (Bloomberg) -- China, the world's biggest consumer of copper, more than doubled imports of the metal in March as the peak demand period for the construction industry began.
Imports of refined copper and alloys rose to 208,014 metric tons, 142 percent more than a year earlier, according to data issued by the Beijing-based customs office today. That's the highest since at least January 2004, according to Bloomberg data.
China's year-on-year imports of copper, used in electrical wiring and pipes, have risen every month since December, as the country stopped running down its domestic stockpiles. The price of copper has gained 26 percent so far this year.
``The high level of refined copper imports was expected, reflecting rising seasonal demand and high profitability of importing in the past months,'' said Wang Xiaodan, an analyst at Minmetals Star Futures Co.
Demand for refined copper in China may rise 10 percent this year, faster than in 2006, as the nation builds more electricity generation capacity, according to CRU International Ltd.
Imports of copper concentrate rose 2.3 percent to 313,407 metric tons last month, the customs' statement said. Exports of refined copper and alloys fell 93 percent to 3,097 tons, it said.
China may slash imports of the metal by half from April and throughout the second quarter because of soaring prices, said traders and analysts, including Li Zhifeng at China Minmetals Nonferrous Metals Co.
Import Profitability
Traders in China increased imports in the first quarter as the ratio of domestic prices to the London Metal Exchange global benchmark made it profitable. The ratio, which was around 9.5 in February, fell as low as 8.8 in early April and stood at less than 9.0 April 20.
For imports from Chile, where a free trade agreement allows exemption from import duty, a reading above 9.2 indicates profitability. For other countries, a reading above 9.4 is conducive to imports.
The ratio is usually calculated by dividing the Chinese cash price in yuan by the London cash price in dollars. Chinese importers have to pay 17 percent value-added tax, 2 percent import duty, freight charges and other costs.
London Metal Exchange copper for immediate delivery settled at $8,005 a ton April 20, while the metal traded in Changjiang, Shanghai's biggest cash market, between 71,800 and 72,000 yuan a ton the same day.
On the London Metal Exchange, copper for delivery in three months traded 0.1 percent down at $2,840 a ton at 9:15 a.m. Shanghai time. Copper for delivery in July rose as much as 1,360 yuan, or 1.9 percent, to 74,200 yuan a ton on the Shanghai Futures Exchange, and traded at 73,850 yuan at 9:15 a.m. local time.
China Demand
China may consume 4.3 million tons of copper, mainly to meet power industry demand, compared with 3.9 million tons last year, London-based metals consulting CRU said April 17.
The country's output of copper fell 2.5 percent to 220,000 tons in March and gained 4.2 percent to 702,000 tons in the first quarter, according to data from the National Bureau of Statistics issued April 20.
Copper stockpiles monitored by the Shanghai Futures Exchange rose 10 percent last week to 67,016 tons. Stockpiles of the rival lightweight metal aluminum fell 21 percent to 61,644 tons.
Alumina imports fell 35 percent to 355,101 tons, while nickel imports rose 5.5 percent to 7,737 tons. Zinc imports fell 43 percent to 20,063 tons, and exports of zinc surged 245 percent to 33,868 tons, it said.
Exports of aluminum fell 66 percent to 38,491 tons, while imports of aluminum rose 7.2 percent to 47,451 tons, it said.
China is the world's biggest user of copper, aluminum, nickel, zinc and lead.