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The Securities and Exchange Commission has approved JPMorgan Chase & Co's plan to launch a physically backed exchange-traded fund for copper in the US. Major end users of copper, including Southwire, Encore Wire, Luvata and AmRod have vigorously opposed the launch of the physically backed ETF. The consumers argue that the removal of 183,000t of copper from the market, 27% of current LME inventories, would have a "devastating" effect on the market by creating tightness in supply. US senator Carl Levin, who is also opposed to the launch of the fund, said that the ETF will "increase copper prices and volatility, and undermine market efforts to produce prices in response to supply and demand by copper users".

According to CRU's Copper Group Manager Vanessa Davidson, annual copper consumption growth will average 4.4% y-o-y during the period 2012-2017 driven by strong consumption in China and the rest of Asia. The Group Manager said she does not see the rising stocks on the LME as being as bearish as it seems, saying it is the result of stocks being transferred into visible locations. The speech was part of the annual CESCO/CRU World Copper Conference held in Santiago, Chile.

According to data from China Customs, Chinese imports of unwrought copper rose slightly in January to 350,958t, a 2.9% m-o-m increase from 341,211t in December. According to a report from the Shanghai Metals Market, the slight improvement in the arbitrage between Chinese domestic prices, and LME prices, may have been responsible for the increase in imports. The report also said that some semis manufacturers have become more confident about the business environment and may increase consumption in the future.

According to Chinese customs figures, imports of copper reached 508,942t in December, up 18% m-o-m. This is the seventh consecutive month which saw a m-o-m increase in the level of copper imports. The growth has been accredited to the arbitrage between the LME and the SHFE. Nevertheless, China's total imports of copper in 2011 were down 5.1% y-o-y, reaching 4.07Mt.

According to the General Administration of Customs, Chinese imports of copper and copper products registered a 6.7% y-o-y and 2.0% m-o-m decline to 344,558t in December 2010. The November figure had seen a 21% y-o-y increase. The fall in imports is partially attributed to soaring copper prices, which discouraged downstream buyers from stocking copper. In addition, the negative arbitrage window between SHFE and LME did not trigger Chinese imports. However, imports may rebound in Q1 2011 on anticipation of increased domestic demand after the Chinese New Year.

Figures released by the General Administration of Customs indicate that Chinese imports of refined copper rose by 8.8% m-o-m in July to reach this year's monthly peak level of 192kt. However, July's imports still represent a decline of 13.5% y-o-y and a year-to-date contraction of 30%. The month on month rise is attributed to the favourable SHFE/LME arbitrage during May and June. However, it remains to be seen whether the import figure indicates stronger Chinese copper consumer demand. Imports of copper scrap rose to 432kt in July, up by 14.2% y-o-y, which brought the total year-to-date figure up to 2.63Mt, up by 9.1% y-o-y.

Electrical wire and cable manufacturer Eurocable Group announced that it has began production of copper wire at its plant near Zagreb as part of a push for the vertical integration of its business. The company is one of the few manufacturers of electrical wire and cable in Europe to launch in-house production of copper wire from copper cathodes. Eurocable Group's in-house production will fully cover the company's needs for 8 mm copper wires, thus cutting operating costs and making external suppliers redundant. The copper cathodes that will be processed at the Jakovlje site will be procured from companies that are members of the LME. Production will initially focus on meeting only the needs of the Eurocable Group itself.

Figures released by the General Administration of Customs indicate that total imports of copper blister, cathode, alloys and semis amounted to 280kt, down by 15% y-o-y but up sequentially by 9.9% in June 2011. Over the period from January to June 2011, copper imports contracted to 1.7Mt, down by 24% y-o-y. The rise in copper imports over the previous month is thought to be attributed to a narrowing price gap between the SHFE and LME cathode spot markets as well as the use of copper imports as collateral for credit.