LME Copper hits one month low of $8,202.75/ton as Chinese imports slide

LONDON (Scrap Monster): LME copper fell to a one-month low of $8,202.75 a metric ton on a day when China reported that March copper imports fell 4.6% from the previous month to 462,182 metric tons, said Commerzbank in a daily commodity briefing.

“There were already indications in the past weeks and months that this would happen, so it should not have come as a surprise. Sharply increased stocks in the warehouses of the SHFE (Shanghai Futures Exchange) made it clear that China had imported more copper than it needed in the previous months,” the bank added.

“What is more, there was no scope for attractive arbitrage between the exchanges in London and Shanghai in March either. In our view, it would be premature to worry about a cooling of growth dynamism in China on the basis of this data, since copper imports were still more than 50% higher than the previous year’s figures. Nonetheless, we do anticipate that dynamism will continue to decrease over the next few months, which may prevent any significant rise in prices,” Commerzbank continued.

Meanwhile, China earlier this week reported that the consumer-price-inflation rate climbed to 3.6%, reducing the probability of any further loosening of monetary policy in the country, in turn also likely to be contributing to the current price slide, they added.

Furthermore, a rise in net length by speculators in Comex futures poses the risk of a further price correction should speculative financial investors decide it’s time to take profits, Commerzbank concluded.