SHANGHAI, Dec 11 (SMM) – Despite the strong rally in copper futures, spot trades in China were in steady premiums this week, underpinned by consumption recovery.

As of Tuesday December 10, spot prices of 1# copper cathode in south China assessed by SMM were in a premium of 40 yuan/mt over the Shanghai Futures Exchange copper contract for December delivery, barely changed from levels seen on December 5 when SHFE copper kicked off its recent ascent.

SHFE copper saw its gains accelerate this week, with the 1912 contract hitting its highest in more than seven months at 48,820 yuan/mt on Wednesday afternoon.

In a soaring market, other physical markets in China all saw smaller spot premiums or wider discounts. Spot premiums in east China stood at 55 yuan/mt as of Tuesday, sharply down from 140 yuan/mt on December 5.

There appeared to be a recovery in copper consumption in the southern regions, which had been sluggish this year due to deteriorating macroeconomic conditions. Southern regions, home to many export-oriented companies, are more sensitive to the US-China trade war than other regions in China.

Weak consumption and inflows of imported materials had kept copper stocks in south China at relatively high levels this year, before the stocks declined in the second half of November. SMM data showed that copper stocks in Guangdong stood at 52,000 mt as of December 6.

Wire and cable producers in the south reported an improvement in recent shipments, propelled by infrastructure, power and property sectors.

However, this round of copper consumption boom in south China is likely to be short-lived, as the rush of producers to step up production and stockpile before year-end may be the major driver of the recent consumption.