The Effect of the July Arrival Gap Continues to Manifest, Premiums Continue to Rise [SMM Yangshan Copper Weekly Review]

This week (June 29 – July 3), the weekly average Yangshan copper premium B/L transaction price range was $49.78–61.16/mt, QP July, with an average of $55.47/mt. The warrant transaction weekly average price range was $49.55–60.98/mt, QP July, with an average of $55.27/mt. EQ copper CIF B/L was $20.5–30.99/mt, QP July, averaging $25.75/mt. As of July 3, the LME copper to SHFE copper 2607 contract ex-FX SHFE/LME price ratio was 1.1359, with import losses around 163.35 yuan/mt, further narrowing from the prior period (loss of 234.08 yuan/mt). As of Friday, the LME copper nearby spread held a slight contango, with the July-August roll gap at -$21.79/mt. Mainstream high-quality ER copper warrant offers are currently near $70–78/mt, with B/L offers near $68–80/mt; CIF B/L EQ copper traded around $40–50/mt.

Yangshan copper premiums extended their uptrend this week, driven by the same logic as last week — earlier market expectations of reduced July port arrivals continued to materialize into actual cargo tightness, gradually revealing price support. On the ratio side, narrowing import losses corroborated the spot logic of tight supply. Overall, this week marks the ongoing transmission from last week's "arrival-cut expectations" into "physical shortage," with supply contraction as the primary boost for premiums, rather than the price ratio or demand-side pull.

According to an SMM survey, as of Thursday this week (July 2), China bonded zone copper inventories fell about 1,300 mt WoW from the prior period (June 25) to 39,700 mt. Shanghai bonded inventories dropped 1,100 mt WoW to 35,800 mt, while Guangdong bonded stocks shed 200 mt WoW to 3,900 mt. Bonded zone inventories declined slightly for a second consecutive week, consistent with tighter port arrivals and shrinking available cargoes. The destocking pace picked up from last week (basically flat total), suggesting bonded restocking speeds lagged the consumption pace.

Looking ahead, if the tight July port-arrival pattern persists through the month, supply-side support for premiums may hold, though it's worth watching whether momentum from this leg up has been partially priced in. Focus on whether July actual port arrival data will validate the current shortage expectations and whether the spot market may continue shifting to a backwardation structure.