China May copper exports hit 14-month peak as traders cash in on LME price jump

China's copper exports edged up for a third straight month in May to their highest level since March last year, customs data showed on Friday, as higher international prices encouraged traders to ship more metal overseas.

China is the world's top copper consumer and rarely exports large amounts. However, last month's surge in London Metal Exchange (LME) copper prices to a record high has not only made imports less favourable for China, but also incentivised shipments in the other direction.

Exports of unwrought copper and copper products were 79,044 tonnes last month, the General Administration of Customs said.

That was up 3.4% from April and up 67.7% year-on-year to the highest level since March 2020, when the coronavirus outbreak led to an initial collapse in Chinese demand and saw China export almost 94,000 tonnes.

The spread between the cash LME and Shanghai copper contracts was mostly negative in May, Refinitiv Eikon data showed, making exports of Chinese metals more favourable.

In the first five months of 2021, China exported 369,403 tonnes of copper, customs said, up 10.5% from a year earlier in a trend that also points to lower domestic consumption.

"Rising exports reflect weaker demand in the onshore market," said ING senior commodities strategist Wenyu Yao, adding that copper traders would choose to deliver metal to LME warehouses in Asia instead of selling in mainland China if that is more profitable.

The LME has registered warehouses in South Korea, Japan, Malaysia, Singapore and Taiwan.

In another sign of sluggish Chinese demand, refined copper stocks in Shanghai bonded warehouses rose by 10,300 tonnes from the previous week to 429,300 tonnes on Friday, according to industry pricing and information provider SMM. That is the highest level since July 2019.