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This week (December 23-26), the weekly average price range of Yangshan copper premiums for B/L transactions was $58-72/mt, QP January, with an average price of $65/mt, up $19/mt WoW; warehouse warrants were $62-76/mt, with an average price of $69/mt, up $14/mt WoW, QP January. EQ copper CIF B/L was $13.5-27.5/mt, with an average price of $20.5/mt, up $9.5/mt WoW, QP January. As of 15:00 on December 26, the SHFE/LME copper price ratio for the SHFE copper 2501 contract was 8.28, with an import profit and loss of approximately +171 yuan/mt. As of Thursday, LME copper 3M-Jan was at C$76.61/mt, and January-date to February-date was at C$43/mt.
Currently, the warehouse warrant price for pyro high-quality copper is $78/mt, mainstream pyro is $71/mt, and hydrometallurgical is 64 yuan/mt; high-quality copper B/L is $74/mt, mainstream pyro is around $67/mt, and hydrometallurgical is $60/mt; CIF B/L EQ copper is $14-28/mt, with an average price of $21/mt.
This week, Yangshan copper premiums surged significantly, mainly due to the copper price drop at the end of last week, which rapidly improved the SHFE/LME price ratio, boosting market purchasing sentiment and resulting in substantial transactions of copper cathode arriving at ports in late December and early January. At the beginning of this week, the SHFE/LME price ratio continued to perform well, but market circulating supply was scarce, and the US dollar copper market stood firm on quotes. Some traders engaged in arbitrage actively sought supplies, but due to limited and high offers, only sporadic transactions occurred. Mid-week coincided with the Christmas holiday, during which LME copper was closed for two days, and the US dollar copper market entered a resting state with almost no offers or transactions. Looking ahead, mid-next week will be the Chinese New Year holiday, coupled with limited market supply, the US dollar copper market is expected to remain inactive. However, the import window is expected to remain open, and Yangshan copper premiums are likely to stay at high levels.
According to the SMM survey, as of Thursday (December 26), domestic bonded zone copper inventories decreased by 8,000 mt WoW (compared to December 19) to 21,900 mt. Among them, Shanghai bonded inventories decreased by 7,700 mt WoW to 18,200 mt, and Guangdong bonded inventories decreased by 300 mt WoW to 3,700 mt. This week, bonded warehouse inventories continued to decline, mainly due to ongoing demand for warehouse warrants in the market, with copper cathode continuously entering the domestic trade market. Additionally, due to low inflows into bonded warehouses, bonded warehouse inventories continued to decrease. Looking ahead, as the market continues to purchase warehouse warrants, bonded warehouse inventories are expected to keep declining.
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