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BEIJING (Scrap Monster): The apparent flow of Chinese copper imports into bonded warehouses is normalizing after a rise this spring, but still-high levels will take time to be drawn down, said Barclays Capital in a research note.

Analysts undertook an analysis of the amount of Chinese imports that go into bonded warehouses, with the metal often used for financing arrangements, as transparent data are not readily available. They looked at data showing the top importers, the amount and whether they are registered in bonded areas in China’s major ports. This gives a read on copper imports into bonded areas, which are more likely to end up in bonded stocks.

The Barclays analysis found that as much as 53% of total copper imports back in April were booked by importers in bonded areas, suggesting much went into bonded stocks. The tide subsided in June and July, which are the latest available data, meaning that recent imports are less inflated by financing and more reflective of real demand.

“The jump in bonded-area net inflows in spring 2012 led directly to a warehouse stock build, whereas the recent moderation helped a gradual destocking and stabilization process. In August, the share of bonded-area imports likely declined again,” Barclays noted.

Since, reports of fresh financing deals have surfaced in September, with developers said to be leaning on copper imports for bridge loans.

“The reported stock build in bonded warehouses shows that the destocking process will take time,” Barclays concluded.