SHANGHAI, Sept. 14 (SMM) –Copper stocks in China’s bonded zone have been hovering around 480,000 tonnes since early September after 220,000 tonne plunge. What broke the downturn?
With just 480,000 tonnes left in bonded zone, there are fewer tradable cargos, the main reason behind the sudden stabilization.
On the other hand, a lower SHFE/LME copper price ratio will inhibit large outflow of bonded copper into China’s domestic market. The SHFE/LME copper price ratio began trending down in September, and dropped to 7.63 as of September 11, SMM data showed.
The SHFE/LME copper price ratio held high earlier, attracting a massive flow of the red metal from bonded zone to domestic market. This explained why copper stocks in China’s bonded zone tumbled 220,000 tonnes from early July to 480,000 tonnes at the end of August.
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