Yangshan copper premiums continued to fall amid quiet trades

SHANGHAI, Jul 7 (SMM) — Yangshan copper premiums with a quotation period in July stood at $16-32/mt under warrants during June 28-July 2, and between $14-29/mt under bill of lading (B/L) with a quotation period in August. The SHFE/LME copper price ratio stood at 7.31 as of July 2.   

Trades remained lacklustre. Offers scheduled for early July were rarely available, and mainstream cargoes offered were slated to arrive in late July. Quotes for mainstream pyro-copper or higher quality cargoes stood at $25-30/mt, with negotiation room. However, the market lacked buying interest. Buyers remained pessimistic over B/L and refrained from purchasing, awaiting declines in import premiums. Some buyers pushed for lower import premiums. The odds over prices between buyers and sellers muted trades. On warrants, most buyers stood on the sidelines amid a lower SHFE/LME copper price ratio. There were only a few trades last week, with import premiums lower than the previous week. Import premiums under warrants are currently quoted at $16-27/mt, down $4/mt from a week earlier on average, and quotes for B/L stand at $14-27/mt, a decline of $1/mt. Yangshan copper premiums will continue to fall amid weak demand and the price spread between warrants and B/L will shrink to around zero.    

Traded import premiums for high-quality pyro-copper currently stand at around $27/mt under warrants, $22/mt for mainstream pyro-copper, and $16/mt for hydro-copper. On the B/L front, premiums stand at $27/mt for high-quality copper, $22/mt for mainstream pyro-copper, and $14/mt for hydro-copper. The quotation period is in July.   

Copper inventories in the Shanghai bonded zone increased 5,800 mt from June 25 to 435,600 mt as of July 2, growing for the fourth consecutive week. The copper price ratio has weakened, muting trades. Weaker demand for customs clearance lowered shipments from bonded warehouses. Meanwhile, arriving shipments under B/L continued to enter bonded warehouses, growing bonded zone inventories.