China's imports of refined copper hit an all-time record in December, rising 89.4% year-on-year. The increase in being blamed on higher Chinese prices, bunched term arrivals and possible buying by the country's State Reserves Bureau.
Official Customs figures showed China imported 211,527 tonnes in December, the highest level ever. Imports for the full year dropped 2.44% over 2007 to 1.46 million tonnes as domestic consumption fell after the global financial crisis reduced overseas buying for Chinese goods.
Analysts said weak prices of the London Metal Exchange copper contract MCU3 MCU0 had created attractive margins for spot imports last month and the record-high imports had not reflected domestic demand, which remained weak.
Mr Jing Chuan chief researcher at Great Wall Futures in Shanghai said SRB may also have imported copper last month to build a stockpile. He said that "Prices and term imports cannot fully explain why December's imports were so big. A possible reason could be SRB's imports."
Industry sources said that the State Reserve Bureau is expected to continue with its plan to boost strategic copper reserves, though it may have postponed another ad-hoc plan to buy copper as a commercial reserve to help support loss-making Chinese smelters and boost the domestic economy. The state body may be buying from small Chinese copper smelters and importing because large smelters do not hold much metal available for spot selling and are not keen to sell to the SRB without attractive premiums over spot prices.
A senior executive at Jiangxi Copper had said this week SRB probably would purchase copper on the international market because domestic copper smelters had limited stocks to sell to the government.
Sources: Steel Guru; Reuters
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