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This week (January 20-24), the weekly average price range of Yangshan copper premiums B/L transactions was $56-70/mt, QP February, with an average price of $63/mt, down $1.6/mt WoW, QP February. Warehouse warrants were $67.25-80.25/mt, with an average price of $73.75/mt, down $2.05/mt WoW, QP February. EQ copper CIF B/L was $6-20/mt, with an average price of $13/mt, down $1.2/mt WoW, QP February. As of 15:00 on January 23, the SHFE/LME copper price ratio for the SHFE copper 2502 contract was 8.15, with an import loss of approximately -500 yuan/mt. For the SHFE copper 2503 contract, the SHFE/LME copper price ratio was 8.16, with an import loss of approximately -700 yuan/mt. As of Thursday, LME 3M-Feb copper was at C$77.66/mt, with a contango of C$37/mt between February and March dates.
Currently, the spot price for pyro high-quality copper warehouse warrants is $80/mt, mainstream pyro is $73/mt, and hydrometallurgical is $66/mt. High-quality copper B/L is $70/mt, mainstream pyro is around $63/mt, and hydrometallurgical is $56/mt. CIF B/L EQ copper is $6-20/mt, with an average price of $13/mt.
As domestic spot premiums/discounts continued to pull back this week, the SHFE/LME price ratio remained under pressure at low levels. The spot market was sluggish before the Chinese New Year, with both buyers and sellers inactive. Export profitability prompted some domestic smelters to transfer inventory to bonded zones, but actual transactions were weak due to declining downstream demand. According to SMM, some traders plan to transfer LME Asia warehouse stocks to North America for delivery, with LME Asia inventories falling below 260,000 mt this week. With the Chinese New Year approaching, spot market supply and demand were weak, and late-January arrivals saw limited transactions. Most market offers and deals were concentrated on QP March cargoes, and the market is expected to remain priced but inactive before the holiday. For EQ copper, buyers and sellers had significant differences, with post-holiday offers firm at $20/mt, QP March, but buyers showed low acceptance of this price. Looking ahead, with only one trading day next week, most spot market participants have already gone on holiday, making transactions scarce. After the Chinese New Year, the market will be significantly influenced by domestic premiums and copper price trends. If the import profit window opens, the US dollar-denominated copper market is expected to rebound quickly after the holiday.
According to the SMM survey, as of Thursday (January 23), copper inventories in domestic bonded zones fell by 600 mt WoW (from January 16) to 19,700 mt. Among them, Shanghai bonded inventories rose by 1,000 mt WoW to 16,200 mt, while Guangdong bonded inventories fell by 1,600 mt WoW to 3,500 mt. The rebound in Shanghai bonded inventories this week was mainly due to increased exports from domestic smelters, while Guangdong inventories returned to previous levels after earlier increases were digested. Overall inventory changes were relatively small. As some domestic smelters are expected to transfer cargoes to bonded zones during the holiday, coupled with partial production suspensions by downstream enterprises before the Chinese New Year, bonded zone inventories are expected to increase during the holiday.
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