SMM Sees Further Downside Room for Copper Import Premiums

SHANGHAI, Mar 27 (SMM) - Domestic traders will liquidate stocks this week due to the month- and quarter-end cash crunch, weighing on spot quotes. Yangshan copper premiums for warrants are expected to be further slightly lowered. In terms of bills of lading, there will be concentrated shipments arriving this week. Sellers are still optimistic about the premiums in April. The downside room for Yangshan copper premiums will be limited.

As of Friday March 24, copper inventories in the domestic bonded zones decreased 8,800 mt from March 17 to 191,800 mt, according to the latest SMM survey. Inventory in the Guangdong bonded zone dipped 1,500 mt to 13,500 mt, and inventory in the Shanghai bonded zone fell 7,300 mt to 178,300 mt. Trading of seaborne copper under warrants picked up two weeks ago after the opening of the import window, growing shipments from bonded zone inventories. Arriving shipments under bill of lading, on the other hand, remained low.

Last week, the import window closed, muting trades. Some cargoes under bill of lading slated to arrive at the month-end are believed to have gone to the bonded warehouses, and shipments under warrants from bonded zone inventories will also decline. The decline in copper inventories in China’s bonded zones is unlikely to sustain.