December 8, 2014 / 7:54 AM / in 5 years

China metals imports seen weak in H1 on low 2015 term shipments

* Copper imports may fall vs H1 this year - Antaike

* Term booked on copper to fall 30 pct, on zinc 50 pct - traders

By Polly Yam

HONG KONG, Dec 8 (Reuters) - Chinese imports of copper, zinc and nickel will be restrained in the first six months of 2015 by tight credit, trading sources and analysts said, with buyers taking fewer term shipments and turning to stocks in bonded warehouses.

Many banks in China have cut lending on imports of metals in a wake of a probe launched in May by Chinese authorities of suspected fraud at the Qingdao port.

Many importers of metals have cut term shipments in 2015 as they are afraid they will not get letters of credit, said traders and end-users.

Buyers often take the bulk of their purchases in term shipments to secure supplies and lock in a fixed premium. Term shipments made up a majority of metals imports in 2014, with term accounting for up to 80 percent of copper imports.

“At least in the first half of 2015 metals imports are likely to fall against first half this year,” said Yang Changhua, senior analyst at state-backed research firm Antaike.

The forecast excludes potential imports by China’s stockpiler, State Reserves Bureau which has boosted buying of refined copper and nickel this year.

Falling spot premiums were also discouraging importers from booking 2015 term shipments, Yang and traders said.

A buyer for a large end-user of refined copper said Chinese importers were likely to reduce term shipments of refined copper cathode by about 30 percent in 2015, down from an average of about 250,000 tonnes per month estimated for 2014.

Firms were also trying to cut bonded copper stocks, estimated at about 500,000 tonnes in Shanghai, traders and importers said.

Premiums for the stocks traded at about $70-$90 a tonne last week, lower than 2015 premiums offered by Chile’s Codelco at $133 and international traders at $110-$120.

Copper imports could improve in the second half of 2015 as bonded stocks fell and expected demand from infrastructure projects rose around April ahead of the construction season, the buyer for end-user said.

Zinc term shipments could fall to less than half of the about 500,000 tonnes estimated for this year, traders said. A zinc buyer, who imported about 200,000 tonnes last year, had not decided on 2015 shipments as it was unsure about bank credit, a company source said.

A Shanghai-based executive at a large trading firm said nickel spot premiums had fallen to about $50 for metal from bonded stocks, which were estimated at more than 10,000 tonnes in Shanghai.

His firm and many other importers of refined nickel had not yet contracted 2015 shipments, he said. Premiums for 2014 shipments were more than $150.

Traders said term imports for aluminium are also seen lower because of a probe of Dezheng Resources group, a big importer of aluminium in previous years which has been caught up in the Qingdao and Penglai ports scandal.

Reporting by Polly Yam; Editing by Richard Pullin

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