China's copper imports hit record high

China's copper imports hit a record high in December as arbitrage and financing opportunities burnished the metal's appeal, but imports may be weaker from now to June as the Lunar New Year holidays and slower manufacturing weaken demand. China is the world's largest copper consumer, and monthly import figures have been climbing since June 2011.
However, the full year import data was 5.1 percent lower from 2010's record imports, indicating a drop in consumption, and analysts said December's strong figures were more to do with raising money than an increase in physical demand. Imports in January 2012 are also expected to fall, as demand slows down further due to the New Year break and the week-long Lunar New Year holiday in China, analysts said, expecting the downtrend to continue throughout the first half of the year.
"There were a lot of opportunities for arbitrage in December, boosting imports of spot refined copper," said Jing Chuan, chief researcher at Hua Tai Great Wall Futures. Importers in coastal provinces of Jiangsu, Zhejiang and Guangdong had found it easier to obtain letters of credit in late December than in the previous month, encouraging them to import copper to get around stricter rules for yuan loans in the domestic market, traders said. Traders also said investors and merchants had booked large amounts of refined copper in October and the metal arrived in November and December.
Arrivals of copper, including anode, refined metal, alloy and semi-finished copper products such as rods, rose 12.6 percent month-on-month and surged 47.7 percent on the year to 508,942 tonnes in December, surpassing the previous record of 457,999 tonnes in June 2009, data from the General Administration of Customs showed on Tuesday.
Of the December imports, about 386,800 tonnes could be refined copper, the most popular type in the Chinese and international markets, based on the breakdown in November. Monthly record for refined copper stood at 378,943 tonnes in June 2009. In 2011, imports fell to 4.07 million tonnes, down from the record 4.29 million tonnes in 2010. Imports of aluminium, including primary metal, alloy and semi-finished products, by the world's top aluminium consumer surged 31.9 percent on the month and 25.1 percent on the year in December but the figures were down 4.7 percent in 2011 after posting a 58.8 percent yearly fall in 2010. The data showed that aluminium imports were 103,738 tonnes in December and 910,487 tonnes for 2011.