SHANGHAI, Jun. 3 (SMM) – Although the SHFE/LME copper price ratio increased to a favorable 7.2 lately, China’s copper imports are unlikely to post sharp growth with finance-driven demand still anemic, SMM believes.
As a reflection, the Yangshan copper premiums have been falling to $ 57.5 per tonne as of June 2, down $ 15 from late April.
Finance-driven demand has been weak due partly to bank caution towards issuance of L/Cs to metal companies, SMM understands.
“Many companies are less willing to conduct copper financing trades as lending rates in domestic market have been low following continuous interest rate cuts, and this is also dampening demand for imported copper,” SMM research team says.
Also of note is that copper inventories at SHFE registered warehouses fell more slowly, down by merely 6,583 tonnes in the week ending May 29. SMM considered it a sign of slowing copper demand from downstream producers.
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