CME Registered B/L Soars, Warehouse B/L Inversion Rare in History [SMM Yangshan Copper Weekly Review]

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This week (March 3-March 7), the weekly average price range of Yangshan copper premiums B/L transactions was $56-80/mt, QP April, with an average price of $68/mt, up $13.4/mt WoW. Warehouse warrants were $34.6-44.6/mt, with an average price of $39.6/mt, up $1.8/mt WoW, QP March. EQ copper CIF B/L was $0-8/mt, with an average price of $4.4/mt, up $2/mt WoW, QP April. As of March 7, the SHFE/LME copper price ratio for the SHFE copper 2503 contract was 8.13, and the import profit/loss was around -1,350 yuan/mt. As of Friday, LME copper 3M-Mar was Back $25.77/mt, and LME copper 3M-Apr was Back $18.4/mt; the swap fee spread between February date and March date was Back $7.37/mt.

Currently, the spot price for pyro high-quality copper warehouse warrants is $55/mt, mainstream pyro is $50/mt, and hydrometallurgical is $45/mt. High-quality copper B/L is $90/mt, mainstream pyro is around $76/mt, and hydrometallurgical is $62/mt. CIF B/L EQ copper is $8-20/mt, with an average price of $14/mt.

At the beginning of the week, the import SHFE/LME price ratio briefly rebounded, but the warehouse warrant market remained sluggish. Mid-week, Trump's renewed announcement of a copper tariff hike pushed the COMEX most-traded contract up 5% intraday, and the LME-COMEX price spread widened again to $1,000/mt. The transaction center of South American B/L arriving in the near term surged, with the price spread between B/L and warehouse warrants inverted by nearly $50/mt. The rapid increase in B/L prices heightened market concerns about tight March import supply, forcing EQ copper and warehouse warrant prices to rise by the end of the week. According to market sources, forward-month EQ offers once reached as high as $30-40/mt.

According to the SMM survey, as of Thursday (March 6), copper inventories in domestic bonded zones increased by 8,500 mt WoW to 53,900 mt compared to the previous period (February 27). Among them, Shanghai bonded inventories rose by 7,700 mt WoW to 45,000 mt, and Guangdong bonded inventories increased by 800 mt WoW to 8,900 mt. This week, bonded zone inventories increased as expected. With the expansion of the LC price spread, the import supply is expected to remain tight, while the export window reopened, attracting domestic smelters to continue exporting. Since the Chinese New Year, the net inventory buildup in bonded zones has exceeded 25,000 mt. Considering the limited adjustable inventory of domestic smelters, it is expected that although bonded zone inventories will continue to increase, the buildup rate is set to slow down.

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