China May Boost Unrefined Copper Imports on Tax, Analysts Say
2009-11-04 08:01:55.526 GMT
By Bloomberg News
Nov. 4 (Bloomberg) -- Smelters in China, the world's largest copper consumer, may boost imports of the unrefined metal after the government cut a tax on inbound shipments, reducing its cost, two analysts said.
China canceled a 17 percent value-added tax on the gold content of the crude copper imports starting Nov. 1, the Ministry of Finance said in a statement on Oct. 20. The new policy may help smelters save about 1,000 yuan per ($147) ton of refined copper, assuming there are 50 grams of gold content per ton of unrefined copper, Zhu Yanzhong, analyst at Jinrui Futures Co., said.
Copper, used in pipes and power cables, has more than doubled in London this year as China's 4 trillion yuan ($586
billion) stimulus spending and as state stockpiling boosted imports to a record, and the world recovered from its worst recession since World War II, increasing demand for raw materials.
"It should be enough incentive for the smelters to boost imports of unrefined copper," Zhu said by phone from Shenzhen today. Jinrui is a unit of Jiangxi Copper Co., China's biggest producer of the metal.
China may increase imports of unrefined metal from places such as Africa and Kazakhstan, he said.
"If you consider profitability it is now cheaper to bring in unrefined copper," Li Junchao, an analyst at Western Mining Co.'s futures department, said from Shanghai today.
Copper for delivery in three months on the London Metal Exchange gained 1.8 percent to $6,575 a ton by 3:09 p.m. in Shanghai.
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