PREVIEW-China April copper imports likely held at record high

Published: 06 May 2009 23:53:07 PST

* What: Chinese preliminary copper trade data for April

* When: Data will be released around May 11

* Refined copper import seen staying March's record level

* Primary aluminium imports seen over 200,000 tonnes

HONG KONG, May 7 -China's imports of unwrought copper and semi-finished copper products in April likely remained at or above March's record high, as a pick-up in end-user demand added to arbitrage trade and state stockpiling.

But April's imports of aluminium including primary, alloy and semi-finished products are expected to surge from March's multi-year high in April. Inflow of primary metal is expected to come in above 200,000 tonnes -- more than double the previous month -- because of attractive import margins.

China, the world's top consumer of copper and aluminium, will release April figures next Monday, but the inflow of refined copper and primary aluminium, indication of consumption in the country, will only be announced in late May.

To see graphics of copper and primary aluminium imports, click: http://graphics.thomsonreuters.com/059/CN_CPRIMP0509.jpg http://graphics.thomsonreuters.com/059/CN_ALMP0509.jpg

"April's imports of refined copper should not be less than March's, or (should be ) at least similar to March's," said Jing Chuan, chief researcher at Great Wall Futures in Shanghai. "There is a chance that April's imports will be another record."

He added the State Reserves Bureau (SRB) had continued to receive booked imports of refined copper last month, but did not provide a figure.

In March, China imported record 374,953 tonnes of unwrought copper including anode, refined and alloy, and semi-finished products of which 296,843 tonnes were refined. <CU-CNREFIMP>

Inflows of refined copper in March were boosted by arbitrage trade, state buying and fabricators' increased purchases to replace scrap as low imports of the cheaper feed were reducing domestic supply. Scrap imports fell by half in the first two months of this year. [ID:nPEK66792]

But March's record imports failed to push down Chinese prices of spot refined copper <CN-1-CCNMM>, which still rose 10 percent in April versus an 11 percent increase on the London Metal Exchange <MCU0>, because part of the inflow was stored by the SRB and domestic demand had warmed up.

Analysts said they expected the same factors in March to spill over to April.

"We heard that orders for copper tubes from Zhejiang have increased and export orders for central air-con units have risen," said Zhu Yanzhong, an analyst at Jinrui Futures, a subsidiary of top Chinese copper smelter Jiangxi Copper.

LESS ARRIVALS FOR SRB?

But Yang Changhua, an analyst at state-owned research group Antaike, said he expected April imports to fall from March as shipments to the SRB dropped after it imported about 200,000 tonnes of refined copper in the first quarter, equivalent to a quarter of China's inflows.

April's arrivals may also be affected by delayed contracted shipments, said a manager at a large trading house, which had been affected by delayed imports over the past two months.

But arbitrage demand boosted primary aluminium imports in April, estimated at 200,00-250,000 tonnes, traders said, which will be more than China's inflows last year and the first quarter of this year combined. <AL-CNPRMYIMP>

In March, China imported 141,181 tonne of aluminium including primary, alloy and semi-finished products of which 85,965 tonnes was primary metal, the highest since at least 1998.

Merchants had increased bookings for April arrivals on fears of a possible new import tax from May, although the likelihood of this has waned as Beijing faces more accusations of trade protectionism.

"It will not be a surprise if imports were above 200,000 tonnes," a trader at an international trading house said, adding that many Chinese buyers had placed orders in March and early April.

After releasing aggregated April import data for unwrought copper and semi-finished copper products and unwrought aluminium and semi-finished aluminium prodocts on May 11, Chinese authorities will publish a more detailed report several days later and full breakdowns for refined copper late this month.