China¡¯s Copper Imports May Decline as Local Inventories Gain

Copper imports by China, the largest metals consumer, may drop from a record on increasing domestic inventories and as the government stops buying, said an official at China Minmetals Nonferrous Metals Co., the biggest trader.

¡°We¡¯ll need to see whether the stockpiles built up by manufacturers can be consumed in the second quarter and I¡¯m not optimistic about that,¡± Gu Liangmin, deputy general manager of Minmetals¡¯ copper department, said in an interview. Aluminum imports may decline as a summer lull cuts local prices, said analyst Wan Ling from CRU International Ltd. Inbound shipments for both metals may be sustained through May, and fall from June or July, said 10 traders and analysts surveyed by Bloomberg.

Copper, one of the best performing commodities, jumped 50 percent this year as China almost doubled imports. Shipments climbed because of a $585 billion stimulus package, state buying and a lack of scrap material, traders said. Urban fixed-asset investment advanced by almost a third in March and manufacturing expanded for a second month in April, government reports show.

¡°We¡¯ve almost seen all the impact the stimulus plan could have on the economy, and we¡¯ll need to see what happens in the U.S. and the West in the second half,¡± said analyst Sheng Weimin from Wanxiang Resources Co., one of the country¡¯s top copper importers. Wire and cable makers, where consumption appears to be the most resilient, are considering a 10 percent output cut in the summer, he said from Shanghai yesterday.

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