China Sept copper imports jump on scrap crackdown, open arb window

By Reuters / October 12, 2018 / www.mining.com / Article Link

BEIJING, Oct 12 (Reuters) - China's unwrought copper imports surged to their highest in 2-1/2 years in September, while copper concentrate imports climbed an all-time high as the world's top copper consumer's crackdown on scrap leaves it needing other forms of the metal.

China's imports of copper, which include anode, refined, alloy and semi-finished copper products, rose 24 percent from August to 521,000 tonnes last month, data from the General Administration of Customs showed on Friday.

The September imports were 21.2 percent higher than a year earlier and were the highest since March 2016, according to Reuters records.

Copper concentrate and ore imports last month rose 16.3 percent from August to 1.93 million tonnes, an all-time monthly high, and were 21.2 percent higher than a year ago.

"I think China's copper imports will stay high or break records," said Helen Lau, an analyst at Argonaut Securities in Hong Kong. "The main reason is because of the reduced scrap imports because of the waste import restrictions in China.""I think China's copper imports will stay high or break records."

China this year tightened thresholds on impurities in scrap metal imports and slapped a 25 percent tariff on scrap material from the United States, one of its top suppliers, in August.

"Also, the arbitrage window has been open," Lau added, referring to the price difference between Shanghai copper futures and London Metal Exchange prices that determines whether shipments to China are profitable.

"That's also expressed in a rising premium at the port of Yangshan" near Shanghai, she added.

Yangshan copper imports premiums have been at around at $120 per tonne since late September, matching levels not seen since 2015.

Despite the high premiums, which point to strong demand for physical metal, Lau cautioned that demand for copper end-products "is at risk because of the trade war."

(Reporting by Tom Daly; Additional reporting by Melanie Burton; Editing by Christian Schmollinger)

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