China’s surging imports of copperChina Copper Scrap Shortage, Buying Spurs Imports, Scotia Says
April 14 (Bloomberg) -- China’s surging imports of copper are being fueled by a shortage of scrap material and government buying, with refined shipments to the world’s largest consumer likely to be a record in March, Scotia Capital Inc. said.
Supplies of copper from scrap dropped by 80,000 metric tons a month from an average of 139,000 tons over 2007 and 2008 on falling imports, lower domestic output and reduced smuggling, Na Liu, an analyst with Scotia Capital, wrote in an e-mailed report. The assumption was made based on 30 percent metal content in physical scrap supplies, the report said.
The shortage of scrap “is being replaced by imported refined copper” as fabricators switch to the refined metal, Liu wrote. China’s copper scrap supply may drop 700,000 tons this year, Macquarie Group Ltd. said in March.
The country’s copper imports jumped to a record high of 374,957 tons in March as scrap supply plunged and the State Reserve Bureau probably boosted inventories. The country is implementing a 4 trillion yuan ($585 billion) stimulus program, pouring money into roads, railways and power grids.
“On refined basis, March imports are likely to top 300,000 tons for the first time ever,” Liu wrote. “We estimate that at least 75,000 tons of March imports will go to the warehouses of the Strategic Reserve Bureau.” Scotia Capital is a unit of Toronto-based Bank of Nova Scotia