China Copper Ore Imports Jump to Record as Smelters Boost Demand

China’s imports of copper ore and concentrate climbed for a second month to a record as the world’s biggest producer of the refined metal boosts capacity.

Inbound shipments of the partly treated ore used in smelting rose 34 percent to 1.29 million tons in September, according to data today from country’s customs administration. Imports through the first nine months of the year are 20 percent higher than the same period in 2013.

The record shipments come as smelters in the world’s largest metals consumer ramp up production capacity. China produced 681,000 tons of refined copper in August, climbing 7.4 percent from the previous month and 21 percent from the same month last year, according to data from the National Bureau of Statistics. The country added 50,000 tons per month of smelting capacity from April to July and will bring online more than one million tons per year of new capacity in 2015, Goldman Sachs Group Inc. said in a Sept. 17 report.

“Given what we have seen in terms of rising production of refined copper, as well as increasing supplies of copper concentrate, it probably isn’t too surprising that there was a strong imports number in September,” James Glenn, a senior economist at National Australia Bank Ltd., said in an e-mail. “It is quite possible that this trend could continue for a while to come, fueling the widely anticipated market surplus.”

The global surplus of the refined metal will rise to 492,000 tons in 2015, from 353,000 tons this year, Goldman Sachs said in the report.

Treatment, Refining

The fee miners pay smelters and refiners to convert ore into refined metal has been rising, encouraging imports. These so-called spot treatment and refining charges increased substantially after Freeport-McMoRan Inc. resumed ore shipments from Indonesia, SNL Metals & Mining, a researcher, said Aug. 18. Charges may rise to $135 a metric ton through the remainder of the year, according to a Bloomberg News survey in August.

Copper-product imports advanced for the first time in five months, up 16 percent to 390,000 tons, though are still down 15 percent from September last year, today’s customs data showed.

“End-user demand will eventually become the limiting factor with very few signs of industrial or real estate activity picking up significantly in China in the near term,” said NAB’s Glenn. “There also appears to be little scope or appetite for significant stimulus measures any time soon.”

State Grid Corp. of China, which accounts for 45 percent of the nation’s copper consumption, has only increased investment 3 percent this year compared to the same period last year and is unlikely to meet its projected target of 13 percent growth rate, Morgan Stanley said in a report Oct. 8.

China’s aluminum products exports advanced for a third month to 400,000 tons, the highest level since May 2011.

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