China Feb copper, iron ore imports to fall due to holiday
Author:Network sources Source:Network sources Date:2013-03-07

China's imports of copper and iron ore are set to have fallen in February as factories shut for the Lunar New Year break and cyclones in Australia halted ore shipments, but crude oil arrivals likely held at recent strong levels.

Crude oil shipments, which hit the third-highest daily level on record in January at 5.92 million barrels a day, are expected to stay strong as refineries kept up high crude runs ahead of a maintenance period, trade sources said.

Preliminary trade data for February will be released on Friday, while industrial output for January and February is due out on Saturday.

China, the world's second-largest oil consumer and top buyer of copper, steam coal and iron ore, this week set its 2013 economic growth target at 7.5 percent -- a level which analysts said would support a modest pickup in commodity demand this year.

Still, market participants remain edgy about the impact of Beijing's latest rounds of property curbs, which may lead to higher downpayments on homes and increased mortgage rates by the end of this month.


China's crude oil imports, which have risen for three out of four months since October, are expected stay strong as refineries kept up high crude runs ahead of a maintenance period, traders said.

The crude run ratio of refineries owned by Sinopec and PetroChina was above 88 percent by Feb. 21, slightly higher than two weeks earlier, according to energy consultancy ICIS C1 energy.

China imported 5.92 million barrels per day (bpd) of oil in January, the third highest daily rate on record. Moves by the government to raise retail prices at the end of February will also help protect refiners' margins and encourage them to maintain strong production rates in March.


Refined copper shipments are expected to fall in February as buyers scheduled fewer term shipments due to the week-long Lunar New Year holiday, traders said.

Many Chinese factories stay shut for 2 to 3 weeks for the holiday, but domestic smelters normally maintain production due to the high costs of stopping operations. This leads to a surplus in the domestic market and will have encouraged buyers to cut import orders.

In a sign of weaker imports, stocks of refined copper at Shanghai's bonded warehouses fell about nine percent from a record of around one million tonnes in late January to about 910,000 tonnes by late February.

Arrivals of anode, refined metal, alloy and semi-finished copper products rose 2.9 percent month-on-month to 350,958 tonnes in January.


Iron ore deliveries are expected to post a second month of decline in February, in part due to port closures by top exporter Australia due to cyclone threats, with the Lunar New Year holiday also slowing shipments.

Imports of the key steel-making ingredient posted a monthly fall in January to 65 million tonnes, after surging to a record high of 70.9 million tonnes in December.

Traders said coal shipments are set to drop for a second month as import enthusiasm waned due to higher overseas prices than local rates and a seasonal lull in demand.

"Buying interest thinned out in late Jan and February. We've started to see more enquiries coming in but there are few actual transactions since there's still quite a wide spread between the bid and offer prices," said a Singapore-based steam coal trader.


China's February soy imports were expected at 3.86 million tonnes, flat from a year ago, the China National Grain and Oils Information Center (CNGOIC), an official think-tank, said.

The shipments would mark a 19 percent drop from January as crushers shut down operations during the holiday period. China is the larger import of the oilseed.

Good crushing margins would boost imports from South America in the second quarter of the year when restocking of livestock picks up, CNGOIC said.

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