[SMM analysis] the price spread between the three places has widened, and there are signs of cross-regional transfer in the copper market.

April 22 SMM: into late April, affected by the inconsistency between supply and demand, Shanghai, Tianjin and Guangdong electrolytic copper rising trend is different, the price difference also appears to expand obviously. As of April 22, according to SMM today's electrolytic copper quotation data show: Shanghai Pingshui copper price is 170 yuan / ton, Guangdong Pingshui copper price is 250 yuan / ton, North China Pingshui copper price is 300 yuan / ton. For details of the trend, see the following figure:

From the above data, we can see that from the beginning of January to the middle of February, North China has been in the state of deep discount because of the early holiday and the late resumption of labor. Since the middle and late February, the rising water in the three places has been fluctuating and rising, especially in Guangdong and North China in the past two weeks. Recently, the supply of electrolytic copper in North China and Guangdong has decreased significantly (domestic smelters have reduced shipments and imports have been blocked), but demand has remained strong (scrap copper imports are limited, and the effect of electrolytic copper rods replacing scrap copper rods is obvious). This is an important reason for the sharp increase in water supply. At present, the price gap between North China and Shanghai has widened to 130 yuan / ton, the highest for the year, while that between Guangdong and Shanghai has widened to 80 yuan / ton, a relatively high level for the year.

Under this stimulus, some traders plan to pull electrolytic copper from Shanghai to Tianjin. It is understood that the current cost of automobile transportation from Shanghai to Tianjin is about 150 yuan / ton, which can be reached in about a day. Although the price difference between Guangdong and Tianjin Pingshui copper is not large, the copper rod processing fee in Guangdong is much lower than that in North China (750yuan / ton in Guangdong and 1100 yuan / ton in North China). Therefore, some traders and pole factories have begun to transfer goods from Guangdong to North China. As far as we know, the total shipping cost from Guangdong to Tianjin is about 150yuan / ton, which can be arrived in about seven days.

We believe that with a series of cross-regional cargo transfer operations, such as the northward movement of copper from the south to the north, electrolytic copper and copper rods in various regions of the country will be rebalanced, but it may take a longer time, and only by restoring the original balance of supply and demand in various localities can the problem be completely solved.