China Nov copper imports fall to 6-month low as arbitrage window slams shut

China's November copper imports fell for a second consecutive month to a six-month low, customs data showed on Monday, as the closure of a favourable price arbitrage window made bringing in metal from overseas, as well as bonded storage, less attractive.

Arrivals of unwrought copper and copper products totalled 561,311 tonnes last month, the General Administration of Customs said. That was down 9.2% from 618,108 tonnes in October, but up 16.2% from November 2019.

Activity in China's copper-intensive manufacturing sector grew at the fastest pace in over three years in November, according to an official survey whose sub-index for construction - in which copper is also widely used - likewise picked up as China boosts infrastructure spending.

However, a spread between Shanghai and London copper prices that made shipping the metal to top consumer China profitable turned negative in November, signalling an end to the bumper arbitrage flows seen in previous months.

Bonded copper inventories in China, where overseas metal is stored, have been building since the third quarter, underscoring the reduced purchases.

Imports in January-November were at 6.17 million tonnes, extending the annual record high that had been achieved in just 10 months.

China copper demand analyst He Tianyu at CRU Group said the decline in copper imports was within expectations, as imports of the last six months were high.

"Chinese demand for copper is still picking up on a monthly basis. This six-month low (in imports) only means that imports during the second-half this year have been high."

Arrivals of copper concentrate came in at 1.83 million tonnes in November, customs said. That was up 8.3% from October, but down 15.1% from the record 2.157 million tonnes imported a year earlier.

Concentrate supply remains tight as miners and smelters negotiate treatment and refining charges for 2021.

Meanwhile, exports of unwrought aluminium and aluminium products were 424,025 tonnes last month, customs said.

That was slightly up from 418,893.7 tonnes in October, but down 6.2% from November 2019.