BEIJING (Commodity Online): Copper imports by China is seen declining in coming months on the back of a strong buildup of inventories and closing of the arbitrage window. China is the largest consumer of copper in the world, accounting for about 40% to total global consumption.
At the London Metal Exchange, copper is currently trading around $8500/tonne, almost 15% down from its 2011 peak of near $10,000/tonne.
-In August, copper prices had crashed on the back of mass liquidations across asset classes. The lower prices had caught Chinese interest, who started building up their inventories. In fact, a Bloomberg survey states that copper stockpiles at Shanghai warehouses are almost 300,000 tonnes more than a month ago.
-The arbitrage opportunity between LME and the SHFE was also a big boost to Chinese interest. But currently, London prices are more expensive against Shanghai and as such is discouraging imports.
-Spot copper premiums have also been reported to be falling, yet another indication of waning Chinese interest.
