SHANGHAI, Aug. 28 (SMM) – Yangshan copper premiums surged to a one-year high of $115-130 per tonne on Aug. 27, Shanghai Metals Market data find.
“The rise in premiums since late July is due mainly to the high SHFE/LME copper price ratio and traders’ unwillingness to move goods,” SMM copper analyst says.
The SHFE/LME copper price ratio kept rising from July, and climbed further as Chinese yuan’s depreciation promoted buying on the SHFE, while selling on the LME. The ratio reached as high as 7.78 on Aug. 27.
Moreover, falling shipments by major producers in south America in earlier Q3 also tighten the arrivals of imported copper in September.
This, combined with inflows of goods from bonded areas into domestic spot market, has reduced traders’ interest in sales, further strengthening Yangshan copper premiums.
According to SMM data, spot copper in the Shanghai market was averaged at premiums of 85 yuan per tonne on Jul. 31, and turned into discounts of 50 yuan per tonne on Aug. 27.
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