Refined Copper Imports by China Drop on Economy; Exports Fall

China’s refined-copper imports declined 1.3 percent in August from a month earlier as a slowdown deepened in the world’s second-largest economy.

Inbound shipments were 251,008 metric tons last month, compared with 254,339 in July, according to data e-mailed by the General Administration of Customs today. Exports tumbled to 1,707 tons last month from 12,506 tons in July.

The country’s economic slowdown may last longer than during the global financial crisis because of worsening external demand and limited lending to smaller companies, a state researcher said. Growth may slow for a ninth straight quarter to below 7 percent in the January-to-March period, Yuan Gangming, an economist with the Chinese Academy of Social Sciences, said in a Sept. 19 interview. Demand to use the metal as a financing tool may sustain imports, Jinrui Futures Co. said.

“Arrivals will probably remain steady at that level in the next couple of months barring any big changes in interest rates, which could affect financing demand,” analyst Pang Juan said by phone from Shenzhen, referring to companies buying the metal from overseas to use as collateral for financing.

Trading companies receive a letter of credit for imports and then get a window of a few months of cheap loans. They may sell the metal and use the proceeds for higher-yielding investments, or submit a warehouse receipt or a warrant as collateral for a discounted loan.

Copper for three-month delivery on the London Metal Exchange rose 0.7 percent to $8,325.50 a ton by 3 p.m. Shanghai time, or about $268 higher than the January-delivery contract on the Shanghai Futures Exchange, which closed at 59,740 yuan ($9,473) a ton, including a 17 percent value-added tax.

Copper-concentrate imports rose to 694,515 tons in August from 566,028 tons in July, customs data showed.

Stockpiles tallied by the SHFE rose 10,428 tons to 166,829 tons this week, the highest since the week ended May 18, bourse data showed today. Production rebounded to 511,000 tons in August from 483,000 a month earlier, according to data from the National Bureau of Statistics released on Sept. 11.

To contact Bloomberg News staff for this story: Helen Sun in Shanghai at hsun30@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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