China's copper imports hit record in Feb

Imports of copper and alloys by China, the world’s largest consumer, jumped in February to a record as consumers and traders benefited from lower prices to boost stockpiles on expectations of a revival in construction.

Inbound shipments advanced 55 per cent to 283,461 tonnes last month, the Beijing-based customs office said. That’s the highest level since at least 2004, according to data compiled by Bloomberg. Commodities researcher CBI China Co. analyst Qu Yi said purchases were a record.

China increased purchases of copper as the government boosted spending and supplies of scrap plummeted. China’s State Reserve Bureau may buy as much as 900,000 tonnes of copper this year, tripling the amount it is believed to have already acquired, Macquarie Group said.

“The jump could point to an improvement in demand, if stockpile changes also confirm it,” CBI’s Qu said from Beijing. If the low amount of scrap imports are taken into account, the copper purchases overall didn’t gain that much, she added.

Copper climbed 19 per cent this year in London on optimism spending in China and the US, the second-biggest user, will boost demand for cables and pipes. China has unveiled 4 trillion yuan ($585 billion) in stimulus spending and Premier Wen Jiabao said the 8 per cent growth target this year is within reach. The US government has pledged $9.7 trillion to revive its economy.

Scrap shipments were 220,000 tonnes in February, similar to the previous month and half the amount of a year ago, customs data showed today. Copper concentrate imports declined 14 per cent to 440,000 tonnes from January, the data showed.

Copper scrap supply in China may decline 500,000 tonnes to 700,000 tonnes this year, or about 10 per cent of the country’s annual demand for the metal, Macquarie Group said.

China’s demand for refined metal and copper concentrates “should remain solid despite the deteriorating economic outlook” because of the scrap supply shortage, Macquarie analysts led by Bonnie Liu said in an e-mailed report March 14.

The SRB has reportedly bought 300,000 tonnes of copper so far, and there is speculation that it could buy a further 600,000- 900,000 tonnes during the rest of 2009, the analysts said.