Why are Chinese copper imports falling?

May 8, 2013
Metal Detector Update
Why are Chinese copper imports falling?

Max Layton, Roger Yuan, Jeffrey Currie

Lower Chinese copper imports do not equal weak consumption

Chinese unwrought copper imports for April fell by 7% mom, and dropped 21% yoy over the same period, implying a 20-25kt mom fall in refined copper imports in April, to c.195-200kt. The mom fall reflects China’s ability to draw on domestic SHFE and Chinese bonded copper stocks accumulated in 2012, as well as lower Chilean exports owing to the port strike in late March/early April. Owing primarily to the large Chinese stock draws, the early indications are that Chinese apparent demand rose significantly in April, following a small pick-up in March (apparent demand equals refined production plus net imports minus estimated stock change). This estimated pick-up in apparent demand is line with strong semi-fabricated output growth in 1Q13 and industry anecdotes of a further pick-up in demand in April.