SHANGHAI, Apr. 25 (SMM) – The latest LME inventory report confirms LME copper inventories continued to decrease by 2,300 mt on April 23 from the prior day. However, from detailed data, Asian copper inventories on the LME increased for a sixth consecutive day. Since mid-March, Asian copper inventories on the LME have been rallying from the lows, up by nearly 19,000 mt in the recent 20 trading days. From the fundamentals side, the struggle between long and short investors continues.

According to SMM sources, China's imports of refined copper continued to move at high levels in the first quarter, reaching as high as 1.057 million mt totally, and near the 1.084 million mt level in the first half of last year. However, losses for copper importers have been hovering around RMB 3,000/mt since mid-January, leading large quantities of imported copper to stay in bonded warehouses. Holdings in bonded warehouses are climbing towards 600,000 mt.

Owing to the long-standing unfavorable SHFE/LME copper price ratio and considerable losses for imported copper, pressures to re-export are growing. According to recent China Customs data, China's refined copper exports for March were 26,500 mt, up 25,800 mt MoM, implying re-export demand is rising.

The SHFE/LME copper price ratio has yet to improve significantly following price drops in April, while LME copper prices have recently lurched around USD 8,000/mt. Spot copper premiums in London have advanced to the highest since 2009. SMM holds the view future copper price trends should focus on changes in Asian copper inventories on the LME and spot copper premiums in London.