China to Cut Imports, Copper Prices May Be Hit
Source: Commodity Online (7/9/09)
". . .imports of the metal expected to come down by 64% in the second half of the year."
Reasons for this are that imports this year have already crossed record levels. So, China, the world's largest consumer of the metal, may cut refined copper imports to around 100,000t/mo. in July to December, from an average of 280,000t/mo. in the first five months.
There are clear indications that China is now overstocked as the Strategic Reserve Bureau is offering up to 100,000t of copper to the market and traders are preparing for exports of the metal.
Many long-term contracts have been booked and importing copper as a way to obtain finance is very active, too.
Copper, used in construction and power grids, has dropped 9% from the year's high of $5,388/t on the London Metal Exchange on concern that China may slow purchases.
The country's record shipments lifted prices 60% this year, closing the gap between London and Shanghai rates and making it unprofitable to import the metal into China.
China may have stockpiled 500,000t to 700,000t of copper in excess of its industrial needs in the first quarter.
The copper market will remain relatively tightly balanced in the foreseeable future, with China's restocking having prevented the accumulation of a sizeable surplus in reported inventories.