China’s Copper Imports Drop as Arbitrage Remains Closed

Copper imports by China, the world’s largest user, declined 6.6 percent in December from a month earlier as the arbitrage window, or buying the metal in London and selling in China, remained closed.

Inbound shipments of refined metal, alloy and products were 341,211 metric tons last month, the General Administration of Customs said on its website today. That compared with 365,331 tons in November, and a record 508,942 tons a year earlier, according to data compiled by Bloomberg.

A drop of arrivals in China could help to cap inventories at the highest in eight months as domestic production advanced. Trade data released today showed the largest metals user sustained a pickup in growth as total imports grew 6 percent in December and exports rose 14.1 percent, both exceeding estimates.

“Copper imports will probably remain steady in the next couple of months, supported by financing deals, while huge local inventories will keep arbitrage trade unprofitable,” Liang Lijuan, an analyst at Cofco Futures Co., said from Beijing.

Copper stockpiles tallied by the Shanghai Futures Exchange climbed to 206,458 tons last week, the highest since April 19. Output climbed to a record 531,000 tons in November.

Metal for delivery in three months on the London Metal Exchange traded at $8,094 a ton at 12:26 p.m. in Shanghai, $79 higher than futures for April delivery on the Shanghai Futures Exchange at 58,440 yuan ($9,391) a ton, including a 17 percent value-added tax.

Scrap-copper imports rose 3.7 percent from a year earlier to 4.86 million tons in 2012, customs data showed. Imports of unwrought copper and products gained 14 percent to 4.65 million tons last year. Imports of unwrought aluminum and products jumped 29 percent to 1.17 million tons, while exports of unwrought aluminum fell 18 percent to 631,214 tons.

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