SHANGHAI, Dec 12 (SMM) – As delivery day on December 15 approached and purchases for annual long-term contracts ended, poorer downstream demand lowered spot copper premiums by nearly half from levels on Tuesday December 11.
On the morning of Wednesday December 12, spot copper premiums stood at 50-190 yuan/mt over the SHFE December contract in Shanghai, compared with a premium of 100-320 yuan/mt on Tuesday morning.
While sellers initially retained offers at premiums above 100 yuan/mt for standard quality copper, and a premium of 200 yuan/mt for high-quality one, thin transactions lowered premiums by 40-50 yuan/mt at noon. Offers of hydro-copper dipped to discounts of 50-20 yuan/mt before noon.
Lower offers failed to attract downstream purchases. Risk-aversion across traders kept inventories at lows, SMM learned.
This morning, the SHFE 1812 contract faced pressure at the 10-day moving average and settled at 49,080 yuan/mt at the end of the morning trading session, down 10 yuan/mt from that time on December 11.
At noon on December 12, high-grade copper traded at 49,220-49,460 yuan/mt and standard-quality copper traded at 49,160-49,360 yuan/mt.
Import losses increased copper smelters’ exports from November, and this pulled premiums of high-quality copper to the highest of the year, at nearly 500 yuan/mt, on December 10.