The tight supply of imported copper in April led to the re-emergence of B/L re-export transactions in the market [SMM Yangshan Copper Weekly Review].

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This week (April 21-April 25), the weekly average price range for Yangshan copper premium B/L transactions was $98.4 to $110.4/mt, QP May, with an average price of $104.4/mt, up $1/mt WoW. Warrant prices ranged from $83.8 to $92.2/mt, with an average of $88/mt, up $1.6/mt WoW, QP May. EQ copper CIF B/L prices were $57.2 to $67.2/mt, with an average of $62.2/mt, up $2.2/mt WoW, QP May. As of April 25, the SHFE/LME price ratio for the SHFE copper 2505 contract was 8.269, with an import profit/loss of around -750 yuan/mt. As of Thursday, the LME copper 3M-May was at a backwardation of $24.73/mt; the spread between April and May dates was at a backwardation of $2.8/mt.

Currently, the spot price for high-quality ER copper warrants is $95/mt, mainstream ER copper is $90/mt, and SX-EW copper is $85/mt. High-quality copper B/L is $115/mt, mainstream ER copper is around $105/mt, and SX-EW copper is $100/mt. EQ copper CIF B/L prices are $60 to $70/mt, with an average of $65/mt.

This week, during the SMM Copper Conference, market expectations for the S232 tariff were delayed, and the US dollar copper market saw a resurgence of CME concentrated purchases. The Yangshan copper spot market was relatively quiet mid-week, but spot transactions surged towards the end of the week. Overseas traders actively sought CME-registered sources for late April and early May, while EQ copper premiums rose. It was heard that ER copper B/L transactions for late April were at $100-110, and CCC-P, ENM, and ILO transactions for early May were at $110-120, QP May. Far-month vessel schedules and registered B/L were reported at $150, QP June. Domestic warrant offers were traded around $90/5QP. Mid-to-late EQ warrant offers were $60-70/5QP, and were quickly traded at $65-70/5QP. The expected tightness of imported copper cathodes in April has materialized, and with the strong destocking speed domestically, Yangshan copper premiums are expected to rise significantly.

According to the SMM survey, as of Thursday (April 24), domestic bonded copper inventories decreased by 3,400 mt WoW to 85,100 mt. Among them, Shanghai bonded inventories decreased by 3,400 mt to 75,500 mt, while Guangdong bonded inventories increased by 400 mt to 9,600 mt. The continued decline in bonded inventories this week was mainly due to a large number of bonded warrants being canceled and outflows from warehouses into the domestic market since last Friday. According to SMM, a bonded warehouse experienced a queue for concentrated outflows. At the same time, the volume of B/L arrivals in early May remains pessimistic, and the destocking domestically supports a temporary opportunity for the SHFE/LME price ratio to open. Looking ahead, the destocking in bonded areas and LME Asia is still ongoing, and the current strong domestic demand is expected to last at least until after the Labour Day holiday, with bonded inventories expected to continue to decrease.

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