Markets

Refined copper imports climb

By Helen Sun (China Daily)
Updated: 2010-08-24 11:04

A worker at a Jiangxi Copper Corporation factory in Dexing, Jiangxi province. Hu Dunhuang / For China Daily

Traders profit from disparities in London and Shanghai prices

SHANGHAI - Refined copper imports by China, the largest consumer, gained for the first time in four months in July as traders profited from disparities between prices in London and Shanghai.

Inbound shipments were 224,723 metric tons last month, the General Administration of Customs said on Monday. That's 6 percent higher than 211,957 tons in June and 23 percent less than 292,226 tons a year earlier, according to Bloomberg calculations.

"The increase reflects demand for imports in May and June, when higher prices in Shanghai prompted arbitrage trade," Ying Haoliang, an analyst at Orient Securities Futures, said by phone from Shanghai. Arbitrage traders try to profit by buying metal in London and selling it in Shanghai, exploiting a gap in prices.

Copper stockpiles monitored by the Shanghai Futures Exchange declined to the lowest level in six months as of July 30. End-consumers drained local stocks after inbound shipments fell for three consecutive months since April.

Related readings:  Refined copper imports up  China's Daye to double refined copper output by 2015  China Jan imports of refined copper fall 14.7% on month

Stockpiles monitored by the Shanghai exchange fell to 104,507 tons in the week ended July 30, the lowest since January, bourse data showed. Stocks stood at 110,371 tons as of Aug 20, down 3.1 percent from a week earlier.

"It takes one or two months for the imports to arrive in Shanghai. With the arbitrage window closed since early July, imports in August may fall slightly," Ying said.

Copper for three-month delivery on the London Metal Exchange gained as much as 0.6 percent to $7,295 a ton before trading at $7,255 at 3:50 pm in Shanghai.

November-delivery copper on the Shanghai Futures Exchange climbed as much as 0.7 percent to 57,430 yuan ($8,447) a ton, before trading at 57,190 yuan.

Bloomberg News