July 4, 2012

China's May copper usage falls 7%

In May, the apparent use of refined copper in China was 683,600 tonnes, 52,900 tonnes lower, or 7.18%, from April.

China has exported as much as 102,000 tonnes of copper during May.

Actual consumption of refined copper, though, was higher than apparent consumption since copper stocks at both domestic warehouses and bonded warehouses fell significantly during the month. Data showed that SHFE copper stocks fell in May by nearly 60,000 tonnes, but the drop in copper stocks at Chinese bonded warehouses was due partly to re-export demand. In addition, the SHFE/LME copper price ratio has moved higher since mid-May and attracted imported copper into China's domestic markets. Actual consumption of refined copper was higher than apparent consumption during May for the first time this year, and helped ease high inventory pressures.

China's apparent consumption of copper semis in May was 999,600 tonnes, down from over one million tonnes in both March and April. According to SMM surveys of copper semis producers, consumption of copper tube/pipe was stable in May, with demand from copper wire rod producers, the biggest consumers of copper semis, increased slightly.

Based on China Customs data, both imports and exports of China's copper semis during May rose slightly from April, so SMM believes actual consumption of copper semis in May was no less than April amounts. However, it is worth noting that China's apparent consumption of refined copper from January to May reached around 3.85 million tonnes, up 31.47% on-year, while China's apparent consumption of copper semis in the same period was 4.48 million tonnes, up only 5.97%. This would indicate apparent consumption of refined copper was much higher than consumption of copper semis during May, highlighting the increasing pressure on refined copper supply.