Analysis of SHFE/LME Price Ratio Pullback and Trading Expansion, Yangshan Copper Premiums Drop Back Slightly Within the Week [SMM Yangshan Copper Weekly Review]

》View SMM Metal Quotes, Data, and Market Analysis

》Order and View SMM Metal Spot Historical Price Trends             

This week (April 14-18), the weekly average price range for Yangshan copper premium B/L transactions was $98.8 to $108/mt, QP May, with an average price of $103.4/mt, down $0.9/mt WoW. Warrant prices ranged from $82.8 to $90/mt, with an average of $86.4/mt, down $1.8/mt WoW, QP May. EQ copper CIF B/L prices ranged from $55 to $65/mt, with an average of $60/mt, up $5/mt WoW, QP May. As of April 17, the SHFE/LME copper price ratio for the SHFE 2505 contract was 8.26, with an import profit/loss of around -600 yuan/mt. As of Thursday, the LME copper 3M-May was at C$3.91/mt; the spread between April and May dates was C$5.21/mt.

Currently, the spot price for high-quality ER copper warrants is $90/mt, mainstream ER copper is $86/mt, and SX-EW copper is $82/mt; high-quality copper B/L is $108/mt, mainstream ER copper is around $103/mt, and SX-EW copper is $98/mt; EQ copper CIF B/L prices range from $55 to $65/mt, with an average of $60/mt.

This week, transactions in the Yangshan copper spot market were significantly quieter WoW. Sellers' offers were mostly concentrated on cargoes arriving in mid-to-late April, with scattered reports of EQ and CCC-P, ENM, and ILO B/L arriving in May. However, due to persistently high offers, buyers' purchase willingness was poor. As domestic destocking in early April has approached 100,000 mt, the market expects the import window to open in the future, supported by consumption. Additionally, there is likely still a significant gap to be filled in May long-term contracts. Slow long-term contract declarations and optimism about the future have made sellers unwilling to sell at low prices. Buyers and sellers are currently in a short-term stalemate. It is expected that Yangshan copper premiums still have room to rise.

According to the SMM survey, as of Thursday (April 17), domestic bonded copper inventories decreased by 3,100 mt WoW to 88,500 mt. Among them, Shanghai bonded inventories decreased by 2,700 mt WoW to 79,300 mt; Guangdong bonded inventories decreased by 400 mt WoW to 9,200 mt. The continued decline in bonded inventories this week is mainly due to the following factors: 1. Some bonded warrants were canceled and cleared into the domestic market after the recent improvement in the SHFE/LME price ratio. 2. The re-export activity from China to the US has basically ended. 3. Smelter exports have significantly decreased. Looking ahead, the pace of destocking in domestic social inventories has accelerated significantly, with east China falling below 200,000 mt. Supported by domestic demand, there is still room for the import window to widen further. It is expected that bonded inventories will continue to decline.

                                                                                                                 》View SMM Metal Industry Chain Database