China’s Copper Import to Keep 2MT of High Level in 2010

China is expected to import electrolytic copper ingot at more than 2 million tonnes in 2010. The import volume would decrease from the record 3 million tonnes in 2009. However, spot premium for Chinese ingot users stays at the high level and Chinese ingot import keeps above 200,000 tonnes per month this year. China continues to cover ingot shortage in the domestic market where copper demand is rapidly increasing.

Chinese electrolytic copper ingot import totaled 750,000 tonnes for January-March 2010, increasing by 1% from the corresponding period of 2009, according to Chinese custom authority. The monthly import hit 340,000 tonnes in March, which was higher than the monthly average of 260,000 tonnes in 2009. Chinese copper consumption is increasing along active constructions of buildings, condominiums and electric power infrastructures.

Chinese yearly ingot import reached 3.2 million tonnes in 2009. State Reserve Bureau (SRB) increased the national copper stock while domestic copper users consumed electrolytic copper as an alternate material for copper scrap when metal scrap generation totally shrank due to economic slowdown. Chinese copper consumption expanded to 6.5 million tonnes in 2009. Another factor was traders’ speculative import since electrolytic copper price at Shanghai Futures Exchange temporarily is above US$ 500 per tonne higher than the market price at London Metal Exchange.

In 2010, SRB’s stock increase or speculators’ profit taking import wouldn’t appear. At the same time, Chinese smelters are expanding their output capacities. However, the smelters are unlikely to enter high operations due to ore shortage. China’s copper ingot output capacity is expected to reach 6 million tonnes per annum in 2010 but the actual production is forecasted to total around 4.5 million tonnes.