Copper Imports by China Dropping 32% as Stockpiles Deter Foreign Purchases

China’s copper imports may fall 32 percent this year, more than earlier estimated, as stockpiles in the world’s biggest user remain above average, said state-owned researcher Beijng Antaike Information Development Co.

“We have cut our forecast from 2.4 million tons made at the beginning of this year to 2 million tons,” said Antaike copper analyst Li Yusheng in a phone interview. “We think the destocking will continue.”

A decline in imports may push prices further from a record reached in February. Chinese refined copper shipments fell 8.4 percent in 2010 to 2.92 metric million tons, according to the General Administration of Customs.

“Imports failed to climb up in a pickup of seasonal demand in April and May, and this isn’t a good sign,” Li said. “We think inventories at bonded and exchange warehouses can be further tapped to meet demand in fall.”

Stockpiles at the bonded warehouse in Shanghai have fallen to about 400,000 tons from as much as 600,000 tons two months ago, while the historical average was around 200,000 tons, according to Li. Inventories at the Shanghai Futures Exchange- monitored warehouses have fallen 51 percent from this year’s high in March to 87,310 tons last week, bourse data showed.

Imports of refined copper fell 29 percent from a year ago to 756,199 tons in the first four months this year, customs data showed. A breakdown of trade data for May will be released at 2:30 p.m. in Shanghai today.

Price Drops

Copper for delivery in three months on the London Metal Exchange was traded at $9,020 a ton at 12:28 p.m. Shanghai time, about 11 percent lower than February’s record of $10,190.

China’s copper imports have fallen as local output has risen and prices overseas have been more expensive, making imports unprofitable for traders who seek to exploit price gaps between markets. Refined-copper output in China hit a record 470,000 tons in March and was 439,000 tons in May.

Still, the drop in imports so far has prompted expectations of a rebound later this year among some analysts. Prices will rise to a record $12,000 a ton by the end of this year as Chinese imports begin rising from July, said Nicholas Snowdon, an analyst at Barclays Capital, on June 8.

Imports in June may jump 25 percent from April as consumption and investment demand rise, Jesse Jiang, the manager of copper research at Antaike, said June 7.

Copper may climb to a record $11,000 a ton by the end of the year, partly because Japan, the world’s fourth-biggest user, will need to rebuild following the March 11 earthquake, draining global inventories as mining output wanes, analysts in a Bloomberg survey said in April.