Resilient exporters ride the waves as competitors falter

Copper imports drop 7% in June

China's copper imports dropped in June to the lowest since April last year as demand to use the metal as collateral for credit eased amid a probe at Qingdao Port.

Inbound shipments of unwrought copper and copper products fell to about 353,500 metric tons, a 7 percent decline from the previous month.

Bloomberg News calculated the figures by subtracting data for the first five months from the half-year statement released by China's customs office on Thursday.

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Weaker demand from China, the world's biggest user, may weigh on benchmark copper futures in London, which have declined 3.3 percent this year. Prices will slide over the next six to 12 months as production costs drop, China's property sector weakens and commodity financing unwinds following the investigation at Qingdao, Goldman Sachs Group Inc said on Tuesday.

"We see financing activity come off, especially in June after the Qingdao probe," Angela Bi, an analyst at Macquarie Group Ltd, said by phone from Shanghai before the release of the trade data.

The investigation, which focuses on allegations that Decheng Mining pledged stocks of copper, aluminum and alumina at the port multiple times to obtain loans, could undermine the broader practice known as commodity financing, in which traders use raw materials as collateral. Lenders are tightening commodity-backed financing criteria following the investigation.

Copper prices in London slid to a six-week low on June 12 as details emerged last month.

Copper in bonded warehouses in Qingdao fell 40 percent to 30,000 tons as of July 4 from early May, according to CRU Group, a London-based metals consultancy. The impact of the investigation will be felt more in July trade data, Bi said.

"It takes time for traders to cancel shipments, so in July imports will be under pressure," she said.

The Qingdao investigation will not disrupt the copper market, Morgan Stanley said on Tuesday, adding it doesn't believe inventory financing behavior will have any lasting effect on supply and demand fundamentals.

Imports of iron ore were about 77.19 million tons in June, down 0.2 percent from May, according to calculations by Bloomberg based on customs data.

Iron ore for immediate delivery into Tianjin Port fell to $89 a ton on June 16, the lowest level since September 2012, according to the Steel Index Ltd.

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