Refined-copper imports by China, the world’s largest user, climbed to the highest level since June 2009 as lower prices in London prompted arbitrage trade.
Inbound shipments climbed 16 percent to 343,926 metric tons last month from 295,341 tons in October, according to the General Administration of Customs. The arrivals were 48 percent higher than a year earlier.
Imports rose for a sixth month after domestic stockpiles were depleted earlier this year, with the cash premium in Shanghai surging to 700 yuan ($110) in November, prompting arbitrage trade by buying the metal in London and selling in Shanghai. Three-month copper on the London Metal Exchange tumbled 22 percent this year.
“The increase of imports in recent months has started to weigh on the domestic market while demand isn’t particularly good, erasing the spot premiums,” said Pang Ying, an analyst at Shenzhen Rongtuo Trading Co.
The metal for immediate delivery in Shanghai’s Changjiang Nonferrous Metals Market was quoted at about the same level today as the front-month futures contract on the Shanghai Futures Exchange. Stockpiles monitored by the exchange rose to a one-month high of 79,570 tons last week, bourse data showed.
Copper in London traded at $7,476 a ton at 4 p.m. in Shanghai, while the March-delivery contract on the Shanghai Futures Exchange gained 1.6 percent to 54,620 yuan ($8,615) a ton.
Inventories of refined copper at smelters increased for a third-consecutive month and recent discounts have kept producers from selling much amid ample supply, data provider SMM Information & Technology Co. said in a report.
Canceled warrants on the LME, or orders to draw copper from the warehouses, tumbled to 2,100 tons in Asia yesterday from 61,900 tons on Oct. 25, bourse data showed.
China’s manufacturing may contract for a second month in December, indicated by a reading of 49 for a purchasing managers’ index reported by HSBC Holdings Plc and Markit Economics on Dec. 15. The dividing line between contraction and expansion is 50.
Copper concentrate imports rose for the first time in three months to 672,644 tons from 517,097 tons in October, today’s customs data showed.
Treatment charges on the spot market had tumbled to $20-$30 per ton, and refining charges at 2-3 cents a pound, according to SMM. This compares with a deal of $63.5 a ton and 6.35 cents a pound between Jiangxi Copper Co. and Freeport-McMoRan Copper & Gold Inc. in November for 2012.
China also imported 433,476 tons of scrap copper in November, customs data showed today. The arrivals were the highest in a year, according to data compiled by Bloomberg.