China’s refined copper exports surge to 8-year peak and high exports continue

China’s exports of refined copper rose to an eight-year high in May, with exports expected to stay elevated through June, sources told Fastmarkets in the week to Friday June 21

China exported 73,860 tonnes of refined copper in May, up by 49,298 tonnes, or 200.70%, from April’s 24,562 tonnes and up by 55,980 tonnes, or 313.08%, from 17,880 tonnes in May 2023, according to the latest Chinese customs data.

This May’s level also marked the highest level since July 2016, according to customs data.

Chinese copper smelters and big traders exported units to profit from the opening of the export arbitrage window following the strength of copper prices on London Metal Exchange, market participants said.

“The surge in May’s exports [of China’s refined copper] is within market expectation with domestic copper smelters and big traders locking in profits from higher LME copper prices by exporting units,” a copper trader in Shanghai said.

The LME three-month copper price, jumped to an all-time high of $10,954 per tonne on May 20 and averaged $10,241 per tonne in May, up by 6.76% from April’s average of $9,593 per tonne.

Market participants attributed the lack of demand in China’s domestic market to high copper output going straight to increased exports of the red metal.

Chinese copper fabricators refused to buy in the spot market due to the absence of new orders after the rapid rise in the LME copper price, which also muted Chinese market participant interest in imports in refined copper, and led to record-low premiums for Shanghai grade A copper cathode.

Fastmarkets assessed the daily benchmark copper grade A cathode premium, cif Shanghai at $(20.00)-0.00 per tonne on Friday June 21, unchanged from a day earlier and recovering slightly from an all-time low of $(5.00)-(30.00) per tonne on May 30.

“Exports are still ongoing amid export incentives and slow demand in China’s [domestic market] and this is expected to continue in June when domestic smelters will still be operating at high [capacity],” a second copper trader in Shanghai added.

China produced 1.09 million tonnes of refined copper in May, down by 0.05 million tonnes, or 4.14%, from 1.14 million tonnes in April, but up by about 0.01 million tonnes, or 0.6%, from 1.08 million tonnes in May 2023, according to the country’s National Bureau of Statistics.

Output in China in January-May totalled 5.54 million tonnes, up by 8.2% a year earlier, according to NBS data, which would put the 2023 equivalent figure at 5.12 million tonnes, according to Fastmarkets’ calculations.

The relatively higher refined copper output in China was, in part, achieved by using more copper scrap to [offset] tight supplies of copper concentrates,  Fastmarkets understands.

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