China's March refined copper imports fall 43 percent

China's refined copper imports dropped 43 percent in March from the same month last year due to high stocks and strong international prices, although the figure was a rebound from the holiday-shortened month of February.
The General Administration of Customs released breakdowns of the March trade data on Thursday, which showed imports of refined copper, the most popular type in the domestic and international markets, at 192,161 tonnes, a monthly rise of 21.5 percent after falling 35.6 percent in February.
The imports were still 21 percent lower than January 2011. In the first three months, imports by the world's top copper buyer fell 21 percent from a year earlier to 595,963 tonnes. But high international prices boosted exports of refined copper to 36,768 tonnes in March, double from February and a jump of 2,012 percent from March 2010. In the first quarter, outflows surged 1,133 percent to 79,120 tonnes.
The bulk of the outflows were bonded copper and metal made from imported copper concentrates under tolling arrangements, which are duty free in China. The latest figures gave details of the March preliminary trade data released on April 10. "The figure was on the low side. Arbitrage rates were not good and local supply was enough. Both discouraged merchants from imports," said Fu Bin, analyst at Jinrui Futures, a subsidiary of China's top producer Jiangxi Copper. Fu said fabricators had resumed operations in late March after the Lunar New Year holidays. But those end-users had not been building stocks due to high metal prices.
He noted that end-users had increased buying of spot copper at around 70,000 yuan a tonne. Fu said he had expected the April imports to rise from March since fabricators increased operations in late March. Spot copper prices have mostly hovered above 70,000 yuan ($10,727) a tonne since mid-March, after touching multi-year highs around 75,000 yuan in mid-February.
The international benchmark, the three-month London Metal Exchange contract , hit a record $10,190 a tonne on February 15. On Thursday, the premium of the LME to Shanghai third-month contract stood at 1,729 yuan per tonne. Traders believed March's arrivals of refined copper had not been supported by demand but had been caused by delayed term shipments from the holidays in February. Some copper due to arrive at Japanese ports in March had also been diverted to Shanghai after the Japan earthquake quake.
Part of the March arrivals had been put in bonded warehouses in Shanghai as Chinese prices had been lower than costs of imports in the past few months. More than 700,000 tonnes of refined copper may be stored in bonded warehouses, where stocks have not had the local 17 percent value-added tax paid on them and are free to leave the country.
The gaps between Chinese spot copper prices and cash London Metal Exchange copper have narrowed earlier this week, raising hopes that Chinese investors would place spot orders and push up imports in April. Those investors import copper to obtain cash for financing development projects in China, and therefore their margin requirements are typically lower than those by merchants. But such demand would be covered by bonded stocks since the delivery time was shorter than from any supplier ports, traders said.
ZINC SURGES Imports of refined zinc increased 108 percent from a year earlier to 37,667 tonnes in March, more than double from February. In the first quarter, imports surged 43 percent on the year to 87,181 tonnes. Traders said attractive margins in the previous few months had prompted merchants to increase bookings of refined zinc imports.
Increased imports added to stocks in China. Some 1.3 million to 1.5 million tonnes of refined zinc may be stored in private and public warehouses in China, up as much as 50 percent from the beginning of the year.