* Smelters export more than 100,000 T of refined copper in
* May exports expected around 75,000 tonnes
* Export cut to ease domestic supply shortage
By Polly Yam
HONG KONG, May 9 China's smelters have cut
exports of spot refined copper over the past week to sell more
in the domestic market where prices have risen, easing a supply
shortage in the world's top consumer of the metal.
Reflecting the easier availability, premiums copper buyers
in China pay on top of the Shanghai Futures Exchange front-month
contract to secure physical metal have halved to around
500-600 yuan ($80.28-$96.34) per tonne this week from more than
1,000 yuan in April, traders and sources at smelters said.
But the drop in exports could mean constrained supplies in
the international market, supporting benchmark London Metal
Exchange (LME) prices that have fallen more than 8
percent this year due to an expected global surplus.
Large Chinese copper smelters jointly drew up a plan in
March to boost exports of refined copper in an effort to cope
with low domestic prices. They exported more than 100,000 tonnes
in April for spot and term shipments, the traders and sources at
The bulk of the metal had been delivered to bonded
warehouses in China on requests by buyers, they said. This would
not show on customs data until the metal physically leaves the
Smelters' exports were likely to fall to about 75,000 tonnes
in May as they only kept term shipments after increasing spot
selling in the domestic market this month, a trader and an
executive at a large smelter said.
"Smelters' exports this month won't be as high as last month
because they are selling more domestically," the executive said,
who declined to be named because he was not authorised to talk
to the media on the subject.
He added that smelters had already contracted to export
about 75,000 tonnes of refined copper per month for 2014, which,
coupled with spot selling in March and April, would push up
China's shipments to a record 1 million tonnes this year.
China copper premiums in April hit their highest levels
since 2011 after smelters cut domestic supply in favour of
exports. In March, buyers could get discounts.
The high premiums became a draw for smelters to sell more
domestically but prompted some copper end-users to delay spot
purchases, even though seasonal demand pushed up their orders,
according to the traders and sources at smelters.
A high price also led to importers bringing in metal into
the domestic market, traders said.
Premiums for bonded copper stocks in Shanghai have nearly
doubled to $130-$140 per tonne over cash LME prices this
week compared to early April, traders said.
Wu Yuneng, vice president of top producer Jiangxi Copper
, said buyers may face tight supply in coming months
due to falling stocks in China and the LME.
He added that the global refined copper market may see a
deficit of about 600,000 tonnes this year, similar to 2013.
"Many institutions have expected a surplus in the global
market this year. That's right for concentrates but it is not
right for refined copper," Wu said.
Bonded copper stocks in Shanghai stand at about
600,000-700,000 tonnes currently, down from 650,000-700,000
tonnes in late April, even after smelters increased exports to
the bonded warehouses last month, three traders estimated.
Copper stocks in the Shanghai exchange CU-STX-SGH were at
the lowest since December 2011 as of Friday. LME stocks were at
the lowest since October 2008 MCU-STOCKS on Friday.
($1 = 6.2280 Chinese Yuan)
(Editing by Muralikumar Anantharaman)