Weekly Decline in Foreign Trade Activity as Market Traders Mostly Took a Wait-and-See Approach [SMM Analysis]

This week (April 27-April 30), Yangshan copper premiums B/L weekly average price range was $53.5-71.5/mt, QP June, with an average of $62.5/mt; warrant weekly average price range was $56-72.5/mt, QP May, with an average of $64.25/mt; EQ copper CIF B/L was $22.5-41/mt, QP June, with an average of $31.75/mt. As of April 30, the SHFE/LME copper price ratio of LME copper versus SHFE copper 2605 contract (excluding exchange rate) was 1.1395, with import profit around 232.08 yuan/mt. As of Friday, LME copper 3M-Apr was at Contango $43.13/mt. The swap spread between April date and May date was Contango $24.51/mt. Currently, high-quality ER copper warrant firm offer prices were around $56-74/mt, B/L mainstream transaction prices were around $51-73/mt; CIF B/L EQ copper traded at around $20-42/mt.

Early this week, as month-end settlement approached, some enterprises had limited trading activity, and overall market trading volume declined notably WoW. Yangshan copper premiums also pulled back after peaking early in the week. Later in the week, as the import window opened, demand from some enterprises increased, keeping post-holiday arrival cargo offer prices high. Overall, the current spot market trading remained cautious, but post-holiday arrival cargo offer prices still had support. Yangshan copper premiums are expected to recover after the Labour Day holiday.

According to an SMM survey, as of Thursday (April 30), China's bonded zone copper inventories decreased by 3,600 mt WoW (from April 23) to 40,700 mt. Among them, Shanghai bonded inventory decreased by 2,000 mt WoW to 36,900 mt, and Guangdong bonded inventory decreased by 1,600 mt WoW to 3,800 mt. Overall, bonded zone inventory continued to decline this week, mainly because some bonded zone cargo continued to flow into the Chinese market. Looking ahead, if the import window remains open after the holiday and arrival cargo offer prices stay firm, bonded zone inventory is expected to have further downside room.