China’s Electrolytic Copper Import Hits First 3MT in 2009

Chinese electrolytic copper import is likely to reach 3 million tonnes per year for the first time in 2009. The country had imported approximately 1.5 million tonnes per annum for 2007-2008 to cover domestic smelters’ supply shortage against the strong demand related to infrastructures and building constructions. In 2009, China widely increased electrolytic copper import to cover copper scrap shortage when scrap generation shrank along global economy slowdown. SRB’s (State Reserves Bureau’s) strategy to increase national copper stock was one of other factors.

Chinese electrolytic copper consumption totaled 5.2 million tonnes with domestic production at 3.8 million tonnes through 2008, according to International Copper Study Group. The country imported overseas ingot to cover 1.4-million-tonne shortage. Chinese electrolytic copper import was 1.46 million tonnes in 2008, according to the country’s ministry.

In 2009, the import expanded to 1.78 million tonnes only for the first 6 months. The import slowed down in the second half year but the monthly average kept higher than 120,000 tonnes in 2008. The import totaled 2.94 million tonnes for January-November, which must exceed 3 million tonnes for 12 months.

The country expanded electrolytic copper import for January-June when copper scrap generation decreased, the material for copper smelting. China had imported copper scrap at approximately 5 million tonnes every year. The annual import hit 5.58 million tonnes in 2007 and 2008. However, the import shrank by 28% to 4 million tonnes in 2009, the lowest volume since 2005.

Other factors were SRB’s metal stock strategy and speculative procurement expecting for the demand increase in response to the governmental economic measures. High copper market price at Shanghai Futures Exchange (SHFE) also accelerated the ingot import. SHFE copper price was temporarily higher than London Metal Exchange by above US$ 500 per tonne.

Chinese ingot import may slow down in 2010. Concerned sources suppose surplus ingot inventories should exist in the country after the import volume doubled in 2009 from 2008.