China copper imports hit record in March, up 30 percent in Q1

China's copper arrivals hit a record in March, pushing up total imports 30.1 percent in the first quarter from last year, after price differentials between domestic and international markets favoured imports in previous months. Arrivals of anode, refined copper, copper alloys and semi-finished copper products reached 1.43 million tonnes in January to March, data from the General Administration of Customs showed on Wednesday.
In March, imports were at a monthly record 570,000 tonnes versus the previous record 536,000 tonnes in January 2014. That rose 35.7 percent from the Lunar New Year holiday month of February and 39 percent higher from a year earlier.
March imports also reflected that importers had scheduled more shipments for expected seasonal demand in April and May, said traders. Still, high imports in the first quarter did not reflect domestic demand as the growth in world's second-largest economy has slowed, said traders. Imports added supply pressure in the country, prompting Chinese smelters to consider raising exports. "Strong imports were because of good arbitrage ratios. Price differentials between Chinese prices and the LME favoured imports in March, as well as in the whole first quarter mostly," said Zhou Jie, a trade manager at China International Futures (Shanghai).
Credit had increased to the market in March from the previous two months, supporting importers' buying, he added. Zhou said imports in April may stay strong, but that could be off March's record as credit currently was not as good as last month. Helen Lau, analyst at Argonaut Securities also sees lower imports in April due to high inventories in China.
Refined copper stocks monitored by the Shanghai Futures Exchange hit a record on March 18, though they have dropped since. Domestic demand for spot refined copper has improved from the past two months as factories bought more metal for the peak production season in April and May, said a trader at a state-owned smelter. The demand was still weaker than the same time previous years.
Still, a trader at a large copper rods production plant in the southern province of Guangdong said many small factories were struggling with a cash crunch and did not have up-front cash to buy metals, which has forced some to cut orders. "Since last year, many rods sellers have asked for a cash-for-delivery term because of fears of default. This year, some power cables and wires producers are asking the same, which means the cash crunch is extending," he said.
Imports of raw material copper ores and concentrates jumped 34 percent from a year ago to 4 million tonnes in the first quarter. Ore imports in March stood at 1.37 million tonnes, down 6.2 percent from February. Firm domestic aluminium prices limited exports in the first quarter as the prices have risen about 20 percent since a record low in November 2015. Exports of primary aluminium, alloy and semi-finished aluminium products fell 11 percent on-year to 1.08 million tonnes in January to March. March outflows were 420,000 tonnes, up 50 percent from February 2016 and 16.7 percent higher than a year earlier.