UPDATE 1-China July copper imports rise to 14-month high
(Adds comment, details, links)
* July arrivals at 410,680 tonnes vs 379,951 tonnes in June
* Financing needs fuel imports, while seasonal demand weak
* High imports may support prices, down 10 pct this year
By Polly Yam
HONG KONG, Aug 8 (Reuters) - China's copper imports rose for the third straight month in July, growing 8.1 percent to a 14-month high, helped by demand for the metal as collateral for financing and the arrival of shipments from earlier orders.
The strong figure was a surprise to some traders who had expected fewer shipments due to weak seasonal demand in the domestic market.
High imports from the world's top consumer of copper could support prices in the international market, which have fallen about 10 percent so far this year.
The price of benchmark three-month copper contract on the London Metal Exchange rose one percent after the release of the Chinese data to $7,150 per tonne from $7,079 at 0121 GMT.
Copper imports are expected to stay strong this month, since the bulk of contracted spot shipments are due to arrive between August and October.
Arrivals of anode, refined copper, alloy and semi-finished copper products, stood at 410,680 tonnes in July, the highest since May 2012 and up from 379,951 tonnes in June 2013.
The July inflow was up 12 percent from the same month in 2012, data from the General Administration of Customs showed on Thursday.
The July arrivals may have reflected higher imports of refined copper from India after the country's top copper smelter reopened in June, said Zhang Ao, analyst at Minmetals Futures.
"Also, the orders importers placed in June for spot refined copper should have arrived in July if the metal came from other Asian countries," Zhang said.
He added that imports were likely to rise further this month, since the contracted spot shipments from South America should arrive.
Copper importers have found it easier to obtain letters of credit from banks in the past few weeks after lending was tightened in May, supporting demand for imports, traders said.
Refined copper consumption in China has weakened in the past two to three weeks due to lower demand from copper tube producers, traders said.
"Physical demand for copper in July and August is seasonally weaker than June, and the higher imports can't reflect the real market demand as some deliveries to bonded warehouses were driven by financing demand," said Judy Zhu, analyst at Standard Chartered.
Reflecting a rise in imports for financing, stocks of refined copper in bonded warehouses in Shanghai rose to about 400,000 tonnes in early August, from about 380,000 tonnes in mid-July, traders estimated.
The stocks were still down 60 percent from a record of about one million tonnes in the first quarter.
Copper tubes producers in China typically raise production to meet demand from air-conditioner makers in the second quarter and then cut production in the summer.
"The consumption should improve in September," a manager at a copper smelter said.
Copper arrivals fell 15.9 percent to 2.413 million tonnes in the first seven months of 2013, from the same months last year, the data showed.
(Reporting by Polly Yam; Editing by Michael Perry)
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