China January copper imports fall 18.7pc from December record

China's markets were closed for 3 days to mark the beginning of the year, and then again for the week-long Lunar New Year holidays.

"The drop in imports is not unexpected and reflects a moderating economic environment in China," said Stefan Graber, analyst at Credit-Suisse Private Banking.

Traders said Chinese importers had placed many orders for spot refined copper in December due to improved arbitrage -- buying from the London Metal Exchange and selling on the Shanghai market.

Investors and merchants had also rushed to use up their 2011 credit lines before the end of last year, and the bulk of those December bookings had arrived last month, traders said.

Domestic demand, however, was lower in January because most copper processors shut down for the Lunar New Year.

Copper imports -- including anode, refined, alloys and semi-finished products -- amounted to 413,964 tonnes in January 2012 versus a record 508,942 tonnes in December 2011, data from the General Administration of Customs showed on Friday.

Imports, however, were 13.6 percent higher from the same month a year ago, indicating China's appetite for copper remained strong.

"The monthly fall was expected due to the two holidays last month but the figure was still higher than we had expected given the weak domestic demand," Xiao Jing, analyst at Beijing Capital Futures said.

"The relatively strong inflows were mainly because buyers had booked the metal earlier when the arbitrage was good and the shipments arrived in January."

The January breakdown of imports will be announced later in the month, but based on the December breakdown, refined copper imports accounted for about 331,200 tonnes.

Imports of refined copper, the most popular form of the metal in Chinese and global markets, stood at a record high of 406,937 tonnes in December 2011.

Copyright Reuters, 2012