How Did the SHFE/LME Price Ratio Rebound Affect Copper Cathode Imports and Exports? [SMM Analysis]

Since late July, copper prices have gradually declined, releasing some suppressed consumption demand. The SHFE/LME price ratio has also shown some recovery, leading to changes in copper cathode import and export volumes, as detailed below.

SMM expects copper cathode imports in August to decrease by 2.9% MoM but increase by 17.5% YoY, reaching 268,000 mt. The cumulative copper cathode imports from January to August are expected to be 2.345 million mt, up 8.7% YoY. Due to the weak performance of the imported copper market in the Shanghai bonded zone in Q2, the volume of copper cathode shipped to China in Q3 has significantly decreased. Many traders indicated that their upstream suppliers only prioritized long-term orders, with very few spot orders, leading to a continuous decline in copper cathode imports since June. Additionally, the delayed shipment of South American copper cathode, which was supposed to arrive in late August, caused the total volume of copper cathode arriving in August to continue to decline compared to July. According to SMM, due to the improvement in Yangshan copper premiums from July to August, a large trader transported copper cathode from LME Asian warehouses back to China in September. Coupled with the increased volume of copper cathode from Japan and South Korea to China recently, copper cathode imports in September are expected to rebound.

SMM expects copper cathode exports in August to be 30,000 mt. The export window for copper cathode in August has completely closed. According to an SMM survey, most major domestic refineries did not plan any spot order exports, except for long-term orders, leading to a significant drop in copper cathode export volumes in August. However, due to a large trader continuously transferring copper cathode from bonded warehouses for export, SMM expects August copper cathode export volumes to be higher than normal long-term order levels. Looking ahead to September, the export window remains closed, and domestic refineries with export licenses have indicated that they have no export plans for September, with export volumes expected to return to normal levels.