Why Sellers Dominate in Shanghai Imported Copper Market? SMM Reports

Published: Aug 01, 2017 12:18 (GMT+8)

Save

Yangshan copper premiums have been climbing steadily as sellers take the upper hand in Shanghai imported copper market, SMM found.

SHANGHAI, Aug. 1 (SMM) –Yangshan copper premiums have been climbing steadily as sellers take the upper hand in Shanghai imported copper market, SMM found.

Operating Rate to Fall Further at China Major Copper Wire & Cable Producers in August, SMM Expects

Contango on the LME remains high around $ 10/tonne. High yields from bank financing products could cover some capital costs for holding goods on hand. Hence, traders are under no pressure to sell, SMM explained.

Besides, overwhelming bullishness over premium outlook also leaves traders unwilling to sell.

Premiums of warrant goods in spot market have exceeded those under term contracts since two weeks ago. If the SHFE/LME copper price ratio turns favorable, Yangshan copper premiums will probably break through $ 80/tonne this week, SMM estimates.

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

Yangshan copper premiums

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

59 mins ago

Copper prices saw a slight correction; spot premiums edged up after the backwardation between delivery months narrowed [SMM Shanghai spot copper]

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the current pattern of weak supply and demand in the Shanghai spot market persists. On the supply side, available cargoes in the market remain tight, with some suppliers holding limited inventories and showing little willingness to sell at low prices, providing some support for spot premiums. On the demand side, although SHFE copper prices pulled back notably during the day, procurement enthusiasm among downstream processing enterprises has yet to show significant improvement, with a strong wait-and-see sentiment prevailing in the market. Some buyers are concentrating their bids around premiums of 1,100 yuan/mt, creating a certain divergence from supplier quotes, and actual transactions remain primarily driven by rigid demand. Meanwhile, the intraday backwardation spread between futures contracts fluctuated significantly, widening to above 1,000 yuan/mt at one point. The elevated spread combined with high spot premiums continued to push up procurement costs for downstream buyers, further suppressing market transactions. Overall, tight circulating supply still underpins spot premiums, but weak demand and the high backwardation structure are limiting further upside in premiums. Shanghai spot copper premiums are expected to stay high tomorrow.

59 mins ago

1 hour ago

Early trading activity was mediocre, and spot premiums for imported copper held steady [SMM Yangshan spot copper]

1 hour ago

3 hours ago

High premiums suppress demand; spot trades in North China sluggish [SMM North China spot copper]

In North China today, spot #1 copper cathode was quoted at premiums of 850–960 yuan/mt against the front-month contract, with an average premium of 905 yuan/mt, up 30 yuan/mt from the previous trading day. The average transaction price was 109,505 yuan/mt, down 135 yuan/mt from the previous trading day.

3 hours ago