China October Copper Imports Drop to 1-Year Low

Nov. 10 （Bloomberg） -- Copper imports by China, the world’s largest consumer, declined for the second month to the lowest level in a year, as high international prices and ample domestic supplies reduced the appeal of buying from overseas.

Shipments of copper and products fell 26 percent to 273,511 metric tons from 368,410 tons in September, the General Administration of Customs said on its website today.

China’s copper output increased in September, after dipping in July and August, as high prices and high raw-material supplies encouraged production. Inventories in Shanghai warehouses increased 21 percent last month.

“Imports should be lower, as Shanghai and London prices were not good for arbitrage,” Fan Junmei, an analyst at Shenzhen Rongtuo Trading Co., said by phone from Shenzhen.

Copper production gained 3.3 percent from August to 405,000 tons in September, according to the statistics bureau. “Our survey on utilization rates showed that production might be slightly higher in October,” Zhu Lin, an analyst at data provider Shanghai Metals Market, said by phone yesterday.

Copper inventories at Shanghai Futures Exchange-monitored warehouses expanded to the highest level in two months as of last week, according to the bourse. Imports stored in Shanghai’s bonded warehouses have at least doubled in the past three months, Na Liu, Scotia Capital’s China strategy advisor, said in an e-mail yesterday.

Arbitrage trading by buying the metal in London and selling in Shanghai has been mostly unprofitable since late July, according to data compiled by Bloomberg News. Arbitrage traders try to profit by buying metal in London and selling it in Shanghai, exploiting a gap in prices.

Three-month copper on the London Metal Exchange declined 1.2 percent at $8,748 at 12:25 p.m. in Shanghai, after reaching a 28-month high yesterday.

China also imported 310,000 tons of scrap copper, down 24 percent from 410,000 tons in September, data from the Beijing- based customs showed. Imports of aluminum and the metal’s products increased 7.5 percent to 70,729 tons from 65,772 tons in September.