China September Metals Trade Data "Reasonably Healthy"-Barcap

SINGAPORE --Barclays Capital says China's September trade data gives a "reasonably healthy" picture of commodity demand from the world's biggest consumer.

"Looking ahead we do expect to see slower gross domestic product growth result in a moderation of China's demand for metal imports but as yet there are few signs of this happening." the report said.

Net refined copper imports were up 12.2% on year to 109,700 tons, while gross raw material (copper concentrate) imports at 460,000 tons were well above August's figure and up 69% on year.

"We expect refined copper imports to remain at healthy levels of around 100,000 tons over the rest of 2008 as, even with weaker local demand, growth in China's own refined output is likely to stay constrained by the tight availability of raw materials."

For aluminum, Barclays said the data was less healthy, with alumina imports falling 27% on year, reflecting weaker demand from smelters.

"With (aluminum) production cutbacks already starting to emerge at current price levels and delays being reported to commissioning of new capacity, we expect a further slowdown in primary production."

China was a net importer of lead for the third month in a row due to a tight domestic market and the still healthy price premium for domestic lead over London Metal Exchange contracts.

"With the recent steep fall in lead prices (in line with the LME), Chinese smelters are threatening to cut back, so there is a risk that spot availability could tighten, especially given that we are entering the seasonally-strong winter period for replacement battery demand."

Barclays said nickel data presented a mixed picture, with net refined imports growing 55% both on month and on year to 9,900 tons, while low-nickel concentrate imports fell 39% on year reflecting the retreat in Chinese nickel pig iron production due to high energy and coke costs.

   -By James Campbell, Dow Jones Newswires; 65-64154-082; james.campbell@dowjones.com