SG:China copper imports drop to lowest in 19 months as exports gain
Bloomberg reported that imports of refined copper by China, the biggest user, declined in February to the lowest level in 19 months while exports rose for a 6 month.
Data from the General Administration of Customs showed that inbound shipments were 214,949 tonnes last month the lowest since July 2011. Exports expanded to 38,569 tonnes the highest since May from 26,213 tonnes in January.
According to HSBC Holdings Plc and Markit Economics, the drop in arrivals due to Chinese New Year holidays in February may help curb the highest inventories in at least 10 years. A preliminary reading of Purchasing Managers’ Index stood at 51.7 in March. That compares with a final reading of 50.4 for February and median estimate at 50.8 in a Bloomberg survey.
Mr Liang Lijuan an analyst at Cofco Futures Company said that “Imports in the Q2 are likely to remain relatively low compared with last year. The huge inventory and shrinking demand to use the metal as a financing tool will probably curb imports.”
Inventories tallied by the Shanghai Futures Exchange rose to 231,872 tonnes last week, the highest since Bloomberg started to compile the data in 2003. Trading firms in China have imported the metal to use as collateral to obtain cheaper loans, known as financing, even as the arbitrage window is closed.
According to Bloomberg calculations based on the customs data, net imports dropped 19% to 176,380 tonnes last month from 216,961 tonnes in January. Refined copper imports in the first 2 months fell 36% from a year ago to 458,123 tonnes.
