Yangshan Copper Premiums Bottomed Out and Rebounded, Import Losses Extended

Yangshan copper premiums with a quotation period in February stood at $15-30/mt under warrants during February 6-10, and between $6-25/mt under bill of lading (B/L) with a quotation period in February. As of February 10, the SHFE/LME copper price ratio stood at 7.63.

Cash flow issues facing the sellers have relented last week after the sell-off two weeks. This, together will market optimism over the premiums of cargoes scheduled for February, prompted the sellers to raise their quotes, helping quotes under B/L rebound during the week. For warrants, trades remained subdued. As premiums have fallen below the break-even point of most traders, they lacked the motivation to sell. This mitigated market concerns over a severe supply glut.  Traded import premiums for high-quality pyro-copper currently stand at around $30/mt under warrants, and $22-25/mt for mainstream pyro-copper. Those for hydro-copper stand at $15/mt. On the B/L front, premiums stand at $25/mt for high-quality copper, $15/mt for mainstream pyro-copper, and $6/mt for hydro-copper. The quotation period is in February.