[Cu] More Refined Copper Supply in North China Than in South China

SHANGHAI, June 17 (CBI China) -- More refined copper supply was in North China than in South China since mid-June, with traded price spread widened between two regions.

    The downstream processing companies had more choices for raw materials in North China due to continuing sluggish consumption, increasing supply of imported copper and imported copper and ample copper rod supply in this region. In this context, traders had to lower the price to attract the customers. A medium trader said: “traded prices have been lower by RMB 200-400/mt in North China than average price in Shanghai market, while previously prices were higher by RMB 100-200/mt in North China than average price in Shanghai, indicating the fierce competition among traders.”

    On the contrary, market supply was decreasing recently in South China markets. Traders were engaged in the completion of existing long-term orders, or the resources for stock buildup were on the way, contributing to the very tight supply in spot market. In the mean time, this phenomenon was also closely related with recent decreased scrap copper supply in Guangdong province. Cargo-holders were firm with their offers due to scarce supply, with traded price higher by RMB 100-300/mt than average traded price in Shanghai.

    CBI believes resources in North China will unlikely flood into South China due to long distance between two regions and high transportation cost, despite wide traded price spread between two regions. Tight supply in South China will be eased along with arrivals of resources. However, supply surplus will remain unchanged in North China given sluggish downstream demand. 

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