Improved Price Ratio Pushed up Yangshan Copper Premiums

SHANGHAI, May 5 (SMM) - Yangshan copper premiums stood at $30-57/mt under warrants today. The average price was $43.5/mt, $8/mt higher than the previous trading day. Quotes under B/L stood at $22-40/mt. The average price was $31/mt, $4/mt higher than the previous trading day, with the quotation period of June. The quotation refers to the prices of goods arriving at ports in the second half of May. The discounts of LME 0-3 was $1/mt. The import losses were around 100 yuan/mt over the 2205 copper contract.

The SHFE/LME price ratio was improved due to the dropping LME copper prices during the Labour Day holiday. Besides, the high premiums in China and the slight discounts of LME copper spot enabled the imports and 2205 contract to gain profits, further boosting the transactions in the import market. According to the survey today, the improved price ratio heated the offering of quotes in the import market. In terms of warrants, the trading of warrants was active owing to the high efficiency of switching warrants. On the bill of lading front, according to SMM research, due to the difficulty in switching bills,  the delivery of goods was mainly in the form of telex release. Some of the documents were transferred to agencies in Jiangsu before delivery, and the efficiency of circulation was relatively low. Moreover, the import of a far-month contract was at losses, hence the trading was not as active as that of warrants, and the increase in premiums was also not as good as the warrants. 

For now, the high-quality pyro-copper premiums were around $57/mt under warrants, and mainstream pyro-copper and hydro-copper were quoted at $50/mt and $30/mt respectively. The high-quality copper under the bill of lading was quoted at $40/mt, and that of mainstream pyro-copper and hydro-copper were $35/mt and $22/mt respectively.

Disclaimer:

The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.