High Copper Prices Depressed the Downstream Buying, Spot Premiums Fell Before Rallying

Copper prices exceeded 69,000 yuan/mt last week. Spot premiums in Shanghai fell before rebounding amid month-end and quarter-end cash flow issues as well as different tactics of market players.

SMM reported that #1 copper cathode traded with premiums of 70-100 yuan/mt (with front-month invoices) against SHFE 2304 copper contract on Friday March 17, and with premiums of 40-80 yuan/mt (with next-month invoices) over the contract on Friday March 31. The rising copper prices and month-end cash flow issues dampened downstream buying interest.

Most of the trades in the spot market were contributed by arbitrage traders and enterprises liquidating inventories.