BLBG: Copper, Product Imports by China Gain For The First Time in Three Months
Copper imports by China, the world’s largest consumer, rose for the first time in three months, as some trading firms shipped in more material on bets domestic prices may rise more than those overseas.
Shipments of copper and products rose 29 percent from the lowest level in a year last month to 351,597 metric tons from 273,511 tons in October, the General Administration of Customs said on its website today. Total imports in the first eleven months this year gained 0.7 percent to 3.95 million tons.
Copper reached a record yesterday as car sales sped up in China and as global inventories shrank further. China’s exports and imports surged to record values, adding to the case for interest-rate increases and faster currency appreciation.
“It’s really unexpected because it hasn’t been profitable to import copper in the past few months,” said Che Hongyun, an analyst at Galaxy Futures Co. “It’s possible a lot of it is part of long-term orders which were delayed in hope the arbitrage window will re-open, but these shipments can no longer be delayed as there are orders to be fulfilled before the year ends.”
Arbitrage traders try to profit by buying metal in London and selling it in Shanghai, exploiting a difference in prices.
China produced 3.9 million tons of refined copper in January-September, or 13 percent more from a year earlier. Three-month copper on the London Metal Exchange hit a record of $9,091 ton yesterday and gained 0.5 percent to $8,998 by 11:46 a.m. in Shanghai.
Vehicle Sales
China’s total vehicle sales rose 26.9 percent to 1.7 million units in November. A typical U.S.-built car contains more than 50 pounds of copper, and an average luxury model has about a mile of wiring made of the metal, according to the Copper Development Association.
Global demand will outstrip production by 250,000 tons next year, the first shortage since 2007, according to Royal Bank of Scotland Group Plc commodity analysts led by Nick Moore.
China also imported 400,000 tons of scrap copper last month, data from the Beijing-based customs showed. Imports of aluminum and the metal’s products were 76,293 tons in November.
--Feiwen Rong, Glenys Sim. With reporting by Helen Sun in Shanghai. Editors: Richard Dobson, Jarrett Banks.
To contact the Bloomberg News staffs on this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Feiwen Rong in Beijing at frong2@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
