China copper imports fall 17.5 percent on month in June
HONG KONG (Reuters) - China's copper arrivals fell 17.5 percent in June from a month earlier, preliminary customs data showed on Tuesday, resuming a slowdown for much of this year due to falling demand for goods in the world's second-biggest economy.
The monthly fall was broadly in line with the expectations of traders and analysts as copper demand in the world's top consumer of the metal has mostly stayed weak this year, even though imports spiked in May.
Arrivals of anode, refined metal, alloy and semi-finished copper products stood at 346,223 metric tons (381,646 tons) in June versus 419,741 metric tons in May. This reversed a rise of 12 percent in May from a month earlier because of the relocation of inventories from the West to the biggest copper consumer, China.
"The June imports basically returned to the level in April, which isn't bad, considering that everyone had expected imports to ease in the second quarter due to unfavorable price differentials," Bonnie Liu, an analyst at Macquarie, said.
Data on Monday showed China's producer prices fell 0.7 percent on the month and 2.1 percent on the year in June, pushing the PPI to a 31-month trough.
A Reuters poll has forecast the economy grew 7.6 percent in the second quarter, which would be the slowest quarter of expansion since 2009.
In the first half of the year, China's copper imports surged 47 percent from a year earlier to 2.502 million metric tons.
The June arrivals may include about 249,300 metric tons of refined copper, the most popular type in the domestic and international markets, based on the May inflow. Refined copper imports stood at 301,990 metric tons in May. The June figure is scheduled for release on July 21.
Traders said term shipments of refined metal had arrived in June, even though importers had delayed some deliveries to the second half. An end-user of copper estimated that Chinese importers had booked an average of 250,000 to 300,000 metric tons of refined copper cathode per month for term shipments in 2012.
In the physical market, producers of copper rods had bought extra inventories of refined metal last month to cover existing orders from manufacturers of power cables, due to weak metal prices, but backed off later because of expectations of even lower prices, traders said.
Demand for physical refined copper may stay weak in the coming month because consumption from tube producers usually drops during the summer and deliveries for export orders also fall, because of the holiday season in many developed countries.
Producers of copper tubes used in air conditioners are one of the major users of the metal in China and usually boost output before the peak air-con sale season in the summer months, but demand fizzles out after that.
"Credit in China is said to have increased in June. But so far we have not seen demand for copper pick up," a trader at a large producer of refined copper said.
(Reporting by Polly Yam; Editing by Ed Davies)