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Copper January 24, 2015 08:30:27 AM

China's Tumbling Scrap Copper Imports Seen Supporting Prices

Paul Ploumis
ScrapMonster Author
China's copper scrap imports fell to the least in ten years, tightening supply for smelters and signaling refined imports
China's Tumbling Scrap Copper Imports Seen Supporting Prices

BEIJING (Scrap Monster): China’s copper scrap imports fell to the least in ten years, tightening supply for smelters and signaling refined imports of the metal will continue rising.

Total inbound shipments dropped 11 percent to 3.9 million metric tons last year, the lowest since 2004, according to General Administration of Customs data released Friday. December imports rose for first time in three months to 366,534 tons.

China’s purchases of refined copper from overseas climbed last year amid dwindling supplies of scrap, the feedstock for about one third of China’s copper production, according to Ian Roper, a commodity strategist at CLSA Ltd.

“As Chinese scrap-based smelters cut production, you will see China in the market buying more refined copper and that will ultimately turn the LME prices around,” Roper said before the figures were published. “That’s what ultimately brings tightness to the market.”

Inbound shipments of unwrought copper and products rose 7.4 percent to 4.83 million tons, according to customs data. Copper on the London Metal Exchange has fallen 22 percent in the last 12 months and was at $5,612 a ton at 11:26 a.m. in Hong Kong.

Output of refined metal surged to a record last year as smelting capacity expanded amid ample ore supply from miners. Production climbed 14 percent to 7.96 million tons, the Ministry of Industry and Information Technology said Jan 21.

“Tightness in scrap supply has boosted smelter demand for concentrate and downstream demand for cathode, contributing to China’s strong apparent demand for refined copper,” analysts including Nicholas Snowdon at Standard Chartered Plc said in a report Jan. 20.

Courtesy: http://www.bloomberg.com