Decrease in Copper Cathode Imports Evident in January-February, Net Imports Face Significant Reduction [SMM Analysis]

According to the General Administration of Customs, China's refined copper imports in January-February 2025 totaled 533,700 mt, down 12.66% YoY; with 265,700 mt imported in January, down 28.26% MoM and 25.93% YoY; and 268,000 mt in February, up 0.85% MoM and 6.21% YoY. Refined copper exports in January-February 2025 reached 49,400 mt, up 119.35% YoY; with 17,000 mt exported in January, up 1.32% MoM and 99.88% YoY; and 32,400 mt in February, up 91.06% MoM and 131.13% YoY. On the import side, electrolytic copper imports in January-February saw a significant decline, mainly due to two reasons: first, long-term contracts for 2025 were signed slowly, with some shipments of electrolytic copper under long-term contracts only starting in February. Second, from early February, the domestic import losses for electrolytic copper continued to expand, leading to a reduction in active imports by traders. According to SMM analysis, the tight balance and low TCs of copper concentrates have already begun to impact global electrolytic copper supply. Additionally, influenced by the anticipated US tariff policies, the volume of long-distance shipments has significantly decreased, with large amounts of electrolytic copper being directed to the US, causing a rise in CIF premiums for B/Ls globally. From the export perspective, electrolytic copper exports in January-February increased notably YoY, with the export window opening earlier than in previous years. The reasons for smelters increasing exports are as follows: 1. In February, the LME near-term structure turned significantly into BACK, and with the export window open, hedging on the futures market combined with exports could alleviate the losses from raw material costs. 2. Affected by the shutdown of the PSR smelter in the Philippines, the supply gap in regions such as Vietnam and Thailand increased, attracting exports to meet local downstream demand. 3. Post-Chinese New Year, there was a significant inventory buildup, making it difficult for spot premiums to rise. Therefore, apart from fixed long-term contract volumes, exports in January-February increased substantially compared to previous years. Looking ahead, SMM expects that net imports of electrolytic copper will decrease significantly starting from March 2025, for the following reasons: 1. Large-scale re-exports of CME-registered electrolytic copper by major traders will begin in March, and most supplies from Chile, Peru, and Australia will not be imported to China before the US tariffs take effect. Based on the export volume from Chile to China in February, it is estimated that B/L arrivals from Chile to China in March-April will be around 24,000 mt, a significant drop from previous years. 2. A portion of African electrolytic copper will be shipped to Europe and Southeast Asia to fill the supply gap, resulting in a shortage of B/L supplies to East Asia starting from March. 3. As it will take time to reduce domestic inventories, the import window is unlikely to open in the short term, making it difficult for active imports to increase significantly.

SMM

Decrease in Copper Cathode Imports Evident in January-February, Net Imports Face Significant Reduction [SMM Analysis]

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