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China's refined copper imports to increase in Q2 due to demand

Analysts and traders predict that China's imports will increase in the second quarter of this year due to a strong demand for refined copper, as well as a possible decrease in domestic production resulting from smelter repairs.

Analysts said that the demand for copper in the 'world's largest consumer of metal used in powerlines and wiring in electric cars has increased due to increasing grid investment and growing EV purchases.

The price of benchmarks may be supported by higher Chinese imports. On Friday, they reached their highest level since January 29 when?they hit an all-time record of $14,527.50.

State media reported that Chinese power grid investment from January to march rose 37% compared to a year earlier. The Iran War also fueled a surge in?interest for electric vehicles in China as well as the region.

The domestic refined copper supply will likely drop in the second quarter. Analysts at Shanghai Metals Market wrote a Friday note stating that smelter maintenance is expected to reduce refined metal production this quarter.

Nicholas Snowdon of Mercuria's metals and mining department said at the LME Week conference in Hong Kong last week that "China returned from Lunar New Year" with a robust, less-price-sensitive demand. This drove the fastest and largest drawdown in domestic inventories.

The?resurgent' demand is driven by the strong demand in the electrification sector, and on the grid especially.

The Shanghai Futures Exchange announced copper stockpiles on Friday. The?fell 5.6% compared to last week, to 181,333 tons. This is the lowest level since January.

Imports are increasing. Customs data released a few days ago showed that China's imports of refined copper rose by 9% in April from March to 452,000 tons. This is the highest level since September.

Li Ye, Eagle Metal's deputy general manager, told the LME Week conference last week that "downstream orders" had increased since March. He also said imports in the month of April were up by a triple-digit percentage compared to March.

She said that the volume of the last month alone was higher than in the previous three months.

(source: Reuters)