Yangshan copper premiums fell as import window closed

Yangshan copper premiums averaged $51.71/mt under warrants in March, up $1.71/mt month on month, and averaged $52.64/mt under bill of lading, up $4.2/mt month on month. Import premiums of EQ copper averaged $14.02/mt, an increase of $5.36/mt from February.

In March, domestic social copper inventories were at a high level, the discounts against SHFE April copper contract continued. Without improvement in the SHFE/LME copper price ratio, Yangshan copper premiums rose first and then fell within the month. The overall premium remained relatively firm, though.

In April, LME copper prices broke through $9,500/mt. Domestic consumption has been significantly suppressed by the surge in copper prices.

The operating rates of copper semis plants should slow down significantly in April, and social inventories have accumulated repeatedly. As the import window closed, the import premiums for bill of lading slated to arrive in late April plunged, leading to a decline in the Yangshan copper premiums. After the export window opened, some mainstream domestic smelters have been planning exports. It is expected that domestic bonded inventories will hardly see an inflection point in April. The export volume will also increase on a month-on-month basis.