UPDATE 2-China copper imports at new high, aluminium surges

China's imports of refined copper rose to a third straight record in April while aluminium inflows more than quadrupled to a new high, data that may stoke concerns that the world's top consumer is overbought.

Flood of imported metal boosted China's month-on-month apparent demand by 9.8 percent on copper, the third consecutive gain to a monthly figure some 50 percent more than last year's average. Aluminium demand climbed 17.5 percent from March.

But implied zinc consumption -- calculated as the sum of net imports and domestic production, minus the change in reported exchange inventories -- inched down 0.1 percent on the month due to April's fall from March's record imports, while lead fell 2.9 percent after a 10 percent domestic output drop.

The latest round of strong detailed copper trade data from the world's top consumer of most industrial metals was widely anticipated after higher Chinese prices opened up arbitrage trade last month, aided by tight supply of scrap and stockpiling by both the government and some end-users.

While bullish on the surface, the data may be cause for more worry among many traders and analysts who say rising domestic inventories show that domestic demand is actually lagging behind rising supplies, a factor that has already pared prices.

'The apparent consumption on copper was much exaggerated by the State Reserves Bureau's buying,' Judy Zhu, commodity analyst at Standard Chartered ( SCBEF.PK - news - people ) Bank (China). She estimated the real consumption growth was below 5 percent in the first quarter.

'The apparent aluminium consumption was also disguised by commercial stocks in Chinese domestic market,' she added.

In the first four month, demand for copper surged 41.3 percent and zinc rose 29 percent, but aluminium and tin were still down 1.1 percent and 8.5 percent on the year, respectively, as Chinese smelters and miners slowed production.

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