London copper futures rallied nearly 2 percent on Wednesday, boosted by a weaker dollar and a surprise surge in Chinese copper imports in September. Imports of un-wrought copper and semi-finished copper products rose 23 percent to 399,052 tonnes in September, much more than the 300,000 tonnes analysts had said was likely because of a closed arbitrage window.
The spread between the two markets, taking into account China's 17 percent VAT, was in positive territory for most of September, suggesting limiting opportunity for imports. "The import volumes are much larger than our expectations, which I believe represents market demand, especially supported by the increase of scrap copper imports," Li Ye, analyst at Star Futures said.