Copper Imports by China Climb 5.7% on Stockpiling

Copper imports by China, the world’s largest consumer, rebounded 5.7 percent in January from the previous month as fabricators increased stockpiles ahead of a seasonal ramp up in production after the Lunar New Year break.

Inbound shipments of copper and its products were 364,240 metric tons last month, according to a statement on the customs agency website today. That represents a 25 percent jump from the same time last year, it said. Imports dropped 2 percent in December from November.

Copper reached a record $10,160 a ton on Feb. 7 on concern supplies may lag behind demand this year. Stockpiles in Shanghai reached an eight-month high last week. March to May is usually peak production season in China, according to Wu Tianmin, analyst at BOC International （China） Ltd.

“There was very little stockpiling activity among fabricators at the end of last year,” Liang Lijuan, an analyst at Cofco Futures Co., said from Beijing. “As they ramp up production after the Lunar New Year, they don’t have much choice except to re-stock.” The nations financial markets were closed for the holiday from Feb. 2 to Feb. 8.

Freeport-McMoRan Copper & Gold Inc., the world’s largest publicly traded producer, said last week that the constrained supplies that drove prices to a record will persist for the “foreseeable future.”

Chinese copper imports also gained as arbitrage activity returned in late January, BOC’s Wu said. Arbitrage traders and importers profit by buying metal in London and selling it in Shanghai, exploiting the gap in prices. The trade had been mostly unprofitable since July, according to Bloomberg data.

Price Gains

Three-month copper on the London Metal Exchange gained 0.7 percent to $10,035 by 2:17 p.m. in Shanghai. It gained 30 percent in 2010. Stockpiles at the Shanghai Futures Exchange warehouses expanded to the highest level since June, adding 9,899 tons to 144,197 tons last week, according to the bourse.

Global demand will exceed mine output by 822,000 metric tons in 2011, more than double last year’s shortfall, Barclays Capital said on Jan. 20. JPMorgan Securities Ltd. and Macquarie Bank Ltd. also predicted a deficit, and Australia & New Zealand Banking Group Ltd. and Morgan Stanley have boosted their price forecasts.

Rio Tinto Group, the world’s third-largest mining company, forecast that high copper prices will continue amid rising demand and before output from new projects eases a supply shortfall.

“We will see a continued period of strong copper pricing, largely because many of the large mines, including our own, are seeing declining grades, deepening pits,” Tom Albanese, chief executive officer of London-based Rio Tinto, told Australian Broadcasting Corp.’s “Inside Business” television program.

China also imported 360,000 tons of scrap copper last month, data from the Beijing-based customs showed. Imports of aluminum and the metal’s products were 96,283 tons in December.

（source from：Bloomerg）