SHANGHAI, Oct. 25 (SMM) - Copper spot premiums in China jumped last week and rose to 230-280 yuan per tonne October 24, the highest since late July 2015.

What’s behind the surge in spot premiums?

Chinese traders who worked through inventories during October 1-7 China’s National Day holiday purchased after copper prices fell below 37,000 yuan per tonne last week, SMM said. Meanwhile, traders also held their quotes firm.

Limited spot goods available also supported spot premiums, SMM added. Imports were limited recently because of Chinese yuan’s devaluation, although the SHFE/LME copper price ratio has climbed to above 8. Copper inventories on the SHFE are almost the lowest for this year, and downstream demand is stable at present.

Moreover, Chinese smelters hiked prices with nearing of negotiation on term premiums for next year.

Spot premiums will rise further before the negotiation, SMM predicts. But gains will slow after reaching 300 yuan per tonne.

For news cooperation, please contact us by email: sallyzhang@smm.cn or service.en@smm.cn.