Bloomberg News

China’s Copper Imports Rebound From Two-Year Low on Arbitrage

June 21, 2013

Imports of refined copper by China, the biggest user, rebounded in May from the lowest level in almost two years as the price difference between Shanghai and London prompted traders to place orders.

Inbound shipments were 232,155 metric tons last month, data from the General Administration of Customs showed today. That compared with 183,023 tons in April and 301,990 tons a year ago, according to data compiled by Bloomberg. Exports tumbled for a second month to 14,445 tons from 29,072 tons a month earlier, the data showed.

China’s manufacturing is shrinking at a faster pace in June, as a preliminary reading of the Chinese Purchasing Managers’ Index by HSBC Holdings Plc and Markit Economics stood at 48.3, indicating contraction. Copper prices in London fell to $6,692 a ton earlier today, the lowest level in 20 months.

“Price differentials between London and Shanghai in April were encouraging to arbitrage traders,” Jia Zheng, an analyst at East Asia Futures Co., said by phone from Shanghai. “Arrivals in June will probably be steady.”

Arbitrage traders buy copper in London at a lower price and sell in Shanghai at a higher level. Metal for delivery in October on the Shanghai Futures Exchange closed little changed at 49,650 yuan ($8,097) a ton at 3 p.m. local time, $90 higher than the three-month contract on the London Metal Exchange at $6,843.25 a ton, including a 17 percent value-added tax.

Copper-concentrate imports fell to 729,393 tons in May from 842,838 tons in April, customs data showed. That was the lowest level since February, according to data compiled by Bloomberg.

Imports of scrap-copper climbed to 362,351 tons in May from 336,634 tons in April, with arrivals from the U.S. rising to 81,943 tons from 72,413 tons, according to today’s data.

To contact Bloomberg News staff for this story: Helen Sun in Shanghai at hsun30@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net


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