China's April imports of unwrought copper and semi-finished copper products hit a new high and rose 6.6 percent from the last all-time record in March on arbitrage trade, state stockpiling and a pick-up in domestic consumption.
Imports of copper scrap also increased 21.2 percent on the month to 400,000 tonnes in April, easing tight domestic supplies.
Imports of unwrought aluminium and semi-finished aluminium products in April surged 198.9 percent from March's multi-year high because of arrivals of booked arbitrage imports.
China, the world's top consumer of copper and aluminium, imported 399,833 tonnes of unwrought copper including anode, refined and alloy, and semi-finished products in April, surpassing March's 374,957 tonnes, data from the General Administration of Customs showed on Tuesday.
"It's more of the same. The market will probably take this as a bit of a positive. Industrial production is coming online and demand is rising. But sentiment may be tempered by the view that some of the material is being stockpiled and ... consumption hasn't risen as quickly as imports," said Ben Westmore, commodities economist at National Australia Bank.
April's copper imports were in line with expectations. Traders and analysts had expected the inflow to remain at or above March's record level.
Based on the ratio of refined copper to total imports in March, refined copper data, which is an indication of domestic consumption and will be released in late May, could show refined metal inflows of 316,668 tonnes in April, which will be a new all-time record and up from March's record 296,843 tonnes.
"The high copper import numbers were not a surprise. Most in the market were expecting a record in April," said Yingxi Yu, an analyst at Barclays Capital in Singapore.
"The scrap imports also wasn't a surprise, given rising availability. Although the rise is significant month-on-month, it's still down 25 percent on the year. The scrap situation is the most difficult part of the market to forecast, but it's likely scrap will remain tight for the rest of the year."
State buying, arbitrage imports and tight scrap supply continued to support April's refined metal imports.
But Yang Changhua, an analyst at state-owned research group Antaike, said he believed the inflow of refined copper to the State Reserves Bureau may have declined in April from March.
Yang estimated the SRB had imported about 200,000 tonnes of refined copper in the first quarter, a quarter of China's inflows, without providing monthly figures.
He also predicted China's refined copper imports would fall to about 600,000 tonnes in the second quarter from 748,281 tonnes in the first, as state imports fall on steady LME prices.
But domestic demand and export orders for copper-containing products have inched up since April, analysts said.
"We heard that orders for copper tubes from Zhejiang have increased and export orders for central air-con units have risen," said Zhu Yanzhong, analyst at Jinrui Futures, a subsidiary of top Chinese copper smelter Jiangxi Copper.
China is the world's top producer of aluminium but arbitrage demand spurred merchants and fabricators to import in April.
April's imports of unwrought aluminium and aluminium products jumped to 439,902 tonnes versus March's 147,181 tonnes.
"Aluminium exports continue to come down and we can see why from the price spread between LME and Shanghai. It's not conducive to export," Yu said.
Trading sources in China have expected imports of primary aluminium to surpass 200,000 tonnes as merchants increased bookings for April arrivals on fears of a possible new import tax from May, though this likelihood has waned as Beijing faces more accusations of trade protectionism.
Imports are expected to fall in May from April but would be above 100,000 tonnes, they estimated.
Fabricators' orders for exports of aluminium profiles used in housing projects are also rising.
"Export orders for profiles were more than expected during last month's fair," a manager at a fabricator in Nanhai city in Guangdong said, referring to the export-oriented Canton Fair.
He added those orders were for delivery in the second and third quarters of this year.
Source: The Guardian
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