Copper imports by China, the biggest user, climbed for a third month in August as buying of the metal in London and selling in Shanghai increased ahead of an expected rise of demand. Inbound shipments of the refined metal, copper alloy and products increased 11 percent to 340,398 metric tons from 306,626 tons in July, the General Administration of Customs said on its website today. August imports were the highest since January, and 10 percent less than the 379,527 tons of a year earlier. Demand for the metal used in cables and wires usually increase in the September-to-November period after China’s summer, when tight electricity supplies limit use by fabricators and end-consumers. A further gain in shipments to China would support copper prices in London, where the metal has fallen 8 percent this year. “The rising arrivals in recent months is a confirmation that China needs to return to the market after domestic stockpiles depleted in the first half, but the pace of imports may be hampered by an overall slowdown in economic activities,” said Jia Zheng, a trader at Shanghai East Asia Futures Co. Copper stockpiles monitored by the Shanghai Futures Exchange climbed to a 10-month high of 177,365 tons in March before falling more than 50 percent to 80,792 tons in June. Inventory totaled 113,300 tons as of yesterday. Imports of copper and products fell 21 percent in January- August to 2.35 million tons, according to the customs office. Tightening Cycle China’s industrial production in August grew 13.5 percent from a year earlier, the smallest gain in three months, according to data from the National Bureau of Statistics. This compares with the 13.7 percent median estimate in a Bloomberg News survey of 28 economists and a 14 percent increase in the previous month. The People’s Bank of China increased interest rates five times and the reserve requirement ratio nine times since the second half of last year to fight inflation. The central bank also decided last month to broaden the base of reserves it requires commercial lenders to deposit at the central bank. Consumer prices rose 6.2 percent from a year earlier in August, retreating from a three-year high of 6.5 percent in July, data from the statistics bureau showed. Fighting inflation will remain the top priority in the second half of this year and monetary policy will remain “prudent,” the central bank said in its quarterly monetary policy report on Aug. 12. ‘Clouds to Consumption’ “All these tightening measures should have a lagging impact on metals demand, so this adds some clouds to the consumption side this coming fall,” said Wang Zhouyi, an analyst at Shanghai CIFCO Futures Co. Copper inventories in China’s bonded warehouses, where storage is exempt from tariffs and value-added tax, were probably at 380,000 tons, Macquarie Group Ltd. said in a report dated Sept. 5. The stockpiles combined with about 100,000 tons of inventories in the exchange-monitored warehouses will probably allow China to “wait before buying on the international market,” analyst Bonnie Liu said. Scrap copper imports totaled 380,000 tons in August, falling 12 percent from 430,000 tons a month earlier. Total scrap arrivals increased 7.3 percent in January-August to 3.01 million tons, customs data showed. Imports of unwrought aluminum and products totaled 70,983 tons last month, while exports of unwrought aluminum were at 62,227 tons, according to the customs. --Helen Sun. Editors: Jim McDonald To contact Bloomberg News staff for this story: Helen Sun in Shanghai at +86-21-6104-3029 or hsun30@bloomberg.net To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net

Source