China May Increase Copper Imports By 60% From June

By Li Xiaowei

Aug. 20 (Bloomberg) -- China's manufacturers, the world's largest copper consumers, may raise imports by as much as 60 percent from June after a price slump, trader Bayin Resources Co. said.

Imports of refined copper may jump to between 100,000 metric tons and 120,000 tons a month, Frank Zhou, deputy manager of Bayin's copper division, said today in an interview from Shanghai. Purchases fell to 75,707 tons in June, lower than the monthly average of 114,502 tons in the first half.

Copper futures in London has fallen 15 percent from last month's record of $8,940 a ton, amid concern a global economic slowdown would curb demand. China imported 23 percent less refined copper in the first six months from a year ago as demand from consumers such as appliance makers fell.

``There has reemerged a lot of appetite for London copper these days,'' Zhou said over the phone. ``Demand from these inquiring buyers is quite inelastic as they are users, not speculators.''

London-based Barclays Bank Plc holds a 15 percent stake in Bayin. Bayin traded 300,000 tons of copper and 200,000 tons of aluminum last year, according to its Web site.

Price Gap

A narrowing price gap between Chinese and international prices is making imports cheaper, Zhou said. The gap has dropped from historical highs in June.

Copper for three months delivery in London rose 0.3 percent to $7,596 a ton at 1:36 p.m. Shanghai time. Copper for November delivery climbed as much as 1,680 yuan, or 2.9 percent, to 58,930 yuan ($8,597) a ton on the Shanghai Futures Exchange. The most-active contract was at 58,580 yuan at 1:56 p.m. local time.

China's economic expansion has slowed for four quarters, prompting the government to put a bigger emphasis on maintaining growth and protecting jobs. Government statements last month dropped references to a ``tight'' monetary policy.

``As the Chinese economy appears to remain in a downturn, copper users are unlikely to buy unless there's a good bargain,'' Sheng Weimin, manager at Maike Futures Co., said today by phone from Shanghai.

China may consume 10 percent less copper this year because of credit tightening policies by the government, Maike, the country's largest copper importer, forecast in January.

The Asian nation accounts for 23 percent of the world's copper demand, which is estimated at 18.8 million tons, according to Barclays Capital, the investment banking unit of Barclays.

Copper prices may fall a further 10 percent to 15 percent in the short term amid economic growth concerns and weaker demand from China, UBS AG said Aug. 15.

To contact the reporter on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net