China Refined Copper Imports at 10-Month Low as Exports Slump

China’s refined copper imports in June dropped to the lowest level since August as demand for using the metal as a financing tool shrank. Exports also fell.

Inbound shipments were 250,097 metric tons last month, compared with 301,990 in May, according to data e-mailed by the General Administration of Customs today. Exports tumbled to 35,477 tons from 102,375 tons in May, the highest since at least 2008, according to data compiled by Bloomberg.

China has cut interest rates twice and reserve requirement ratio three times this year to bolster the growth, which has slowed to a three-year low of 7.6 percent in the second quarter. Lower imports may help absorb local inventories, as those tallied by the Shanghai Futures Exchange climbed for five weeks in a row to 160,973 tons last week, the highest in two months.

“Shrinking demand for using copper to finance is one of the main reasons for the drop,” said Fang Junfeng, an analyst at Shanghai CIFCO Futures Co. “Weak downstream demand and unprofitable arbitrage trade also contributed to the decline.”

Arbitrage traders reap profits by exploiting price differentials in two places. Three-month copper on the London Metal Exchange fell as much as 1.1 percent to $7,460 a ton today, the lowest since June 29, about $222 higher than its counterpart in Shanghai, including a 17 percent value-added tax.

Barclays Plc lowered its price forecast for this year to $8,120 a ton on July 12, and estimates demand will exceed supply by 139,000 tons, less than its previous estimate of 207,000 tons.

Copper concentrate imports were 480,680 tons in June, compared with 667,904 tons, while arrivals in the first half gained 15 percent form a year ago to 3.38 million tons, today’s customs data showed.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE