Copper Traders Pushed up the Premiums to 500 yuan/mt due to the Tight Supply

SHANGHAI, Aug 17 (SMM) - On August 17, spot premiums of copper cathode in the Shanghai market were 440-520 yuan/mt over the SHFE 2209 copper contract, and the average premium was 480 yuan/mt, up 130 yuan/mt from the previous trading day. The traded prices of standard-quality copper were 62,360-62,620 yuan/mt, and the high-quality copper was traded at 62,390-62,640 yuan/mt. SHFE copper prices fluctuated downward today and once fell to 61,800 yuan/mt.

However, the spot premiums rose, and the buyers were active in purchasing amid the tight supply. In the early trading, standard-quality copper was quoted at premiums of 430-440 yuan/mt, boosting the buying. Before and after the second session, the premiums reached 460-470 yuan/mt. The sellers pushed up the premiums to about 500 yuan/mt at last owing to the tight supply. Quotes of high-quality also remained firm today, slightly expanding the spread with standard-quality copper to 30-40 yuan/mt. Because of the tight supply and the limited inflow of imported goods, quotes for hydro-copper rose to 400-440 yuan/mt, and the downstream was cautious about trading.

On the second trading day after the delivery of the SHFE 2208 copper contract, domestic smelters such as Daye, Tongling, Fuye, etc. reduced their production for the power rationing, which enabled the traders to push up the premiums amid the low absolute inventory. Domestic premiums may rise further as the available sources decreased after the continuous decline in bonded zone inventory and the demand for custom declaration was limited.