SHANGHAI, Jun. 5 (SMM) – Spot copper held discounts across the regions in China in the week ending June 2 after Chinese Dragon Boat Festival from May 28-30, except that in south China which remained premiums as maintenance at copper smelters reduced inflows of inventory.
In Shanghai, some imported copper entered into inventory by customs clearance after the holiday and more traders were active in selling goods for month-end cash demand in May. However, downstream buyers purchased based on orders and planned to buy goods this week, leading to low copper offers at discounts of 90-30 yuan per tonne. Losses of imported copper widened, reducing imported copper supply. Discounts of standard-quality copper offers will narrow this week and those of high-quality copper will trade at discounts of 30 yuan per tonne to premiums of 30 yuan per tonne. Copper supply in Shandong eases with the end of maintenance at Yanggu Xiangguang Copper and rising shipments from other copper smelters. Hence, offers of spot copper will hold discounts of 40 yuan per tonne to 0 yuan per tonne in Shandong this week.
In north China, Tianjin Jinghai District has announced to clamp down all illegal scrap dismantling enterprises and small workshops out of Ziya Industrial Park by June 20, 2017 and launch inspections on industrial scraps dismantling enterprises across the regions in Jinghai District, tightening copper scrap supply and shoring up refined copper demand. However, copper consumption is sluggish in north China as small and medium wire & cable producers remain off-line, or keep production reduction due to environmental checks, National Games of China and Xi’an Aokai scandal and orders at large producers are modest. Besides, spot copper supply increases with rising shipments from copper smelters, and traders are hard to lift copper prices. Spot copper offers kept discounts of 100-60 yuan per tonne in north China last week.
In south China, copper inventory dropped to 27,000 tonnes as of June 2 as maintenance at Jinchuan Fangchenggang copper smelter and Yunnan Copper reduced inflows. Traders thus raised premiums of copper, up to as high as 70 -100 yuan per tonne briefly last week. But, copper will be hard to hold firm premiums in south China this week with the end of overhaul at smelters, SMM expects.
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