Spot copper premiums fell after seaborne copper inflow, rally in futures

SHANGHAI, May 21 (SMM) – Premiums of spot copper cathode declined in Shanghai on the morning of Thursday May 21 as cargo holders were keen to secure orders as copper futures continued to rally and rising amount of imported copper flew into the domestic market. 

Downstream consumers stepped up purchases amid optimistic prospects for copper prices. At noon, premiums for high-grade copper dipped to 170-180 yuan/mt, against the SHFE June contract, and that for standard-grade copper fell to 150-160 yuan/mt, as compared with premiums of 180-200 yuan/mt in early trades this morning. Transactions of standard-grade copper outperformed that of high-grade copper. 

Premiums of hydro-copper slipped to 120-130 yuan/mt at noon from 150 yuan/mt in the early morning, following the entering of imported materials that had a great proportion of hydro-copper and low-end copper. 

Seaborne copper will continue to enter the domestic market if elevated Shanghai copper further lifts the SHFE/LME copper price ratio. This is expected to see spot copper premiums staying below 200 yuan/mt in the near term.  

The SHFE June copper contract advanced to above 44,000 yuan/mt as the market anticipates more supportive policies around economic development and new infrastructure with the “two sessions” convening on May 21. The contract finished the morning trading hours 1.32% higher on the day at 44,400 yuan/mt. 

As of noon on May 21, trades of high-grade copper occurred at 44,560-44,670 yuan/mt with standard-quality copper trading at 44,550-44,650 yuan/mt.