Few Transactions for Near-Port Supplies, Weekly Spot Trading Center Moves Downward [SMM Yangshan Copper Weekly Review]

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       This week (December 30 - January 2), the weekly average price range of Yangshan copper premiums for B/L transactions was $56-73/mt, with QP shifting from January to February, and the average price at $64.5/mt, down $0.5/mt WoW. Warehouse warrants were $59-77/mt, with an average price of $68/mt, down $1/mt WoW, QP in January. EQ copper CIF B/L ranged from $13/mt to $27/mt, with an average price of $20/mt, down $0.5/mt WoW, QP in January. As of 15:00 on January 2, the SHFE/LME copper price ratio for the SHFE copper 2501 contract was 8.27, with an import profit and loss of approximately +194 yuan/mt. For the SHFE copper 2502 contract, the SHFE/LME copper price ratio was 8.27, with an import profit and loss of approximately -132 yuan/mt. As of Thursday, LME 3M-Jan copper was at C$94.77/mt, and January-date to February-date was at C$45/mt.

       Currently, the actual transaction price for pyro high-quality copper warehouse warrants is $73/mt, mainstream pyro copper is $67/mt, and wet-process copper is $59/mt. High-quality copper B/L is $70/mt, mainstream pyro copper is around $65/mt, and wet-process copper is $56/mt. CIF B/L for EQ copper is $13/mt to $27/mt, with an average price of $20/mt.
At the beginning of the week, the import profit window narrowed but reopened after the overseas market declined post-holiday. Spot offers remained high. Downstream demand for early January arrivals and bonded warehouse warrants was still significant, but suppliers had already locked in most near-arrival cargoes during the favorable SHFE/LME price ratio earlier, resulting in limited market transactions. Bonded warehouse warrants in east and south China were nearly depleted, and trading volumes were also low. Most market offers focused on cargoes arriving during the Chinese New Year and early February. Considering the high cost of holding funds before the holiday, the transaction center pulled back slightly compared to the beginning of the week. For EQ copper, demand for late January arrivals remained robust, and EQ copper still had profit margins before the import window closed. Looking ahead, with less than a month until the 2025 Chinese New Year, it is difficult to find offers for pre-holiday cargoes, and LME warehouse inventories are unlikely to be imported into China before the holiday. Under the expectation of weakening market demand, Yangshan copper premiums are expected to decline slowly next week.

       According to the SMM survey, as of Thursday (January 2), domestic bonded zone copper inventories decreased by 3,000 mt WoW (compared to December 26) to 18,900 mt. Among them, Shanghai bonded inventories decreased by 2,800 mt WoW to 15,400 mt, and Guangdong bonded inventories decreased by 200 mt WoW to 3,500 mt. In the last week of 2024, bonded zone inventories continued the destocking trend, with inventories in both Shanghai and Guangdong bonded zones bottoming out. Some downstream enterprises maintained fixed demand for bonded warehouse warrants. Looking ahead, January's imported copper arrivals are expected to be basically flat compared to December. Supported by the SHFE/LME price ratio, warehouse warrant prices are expected to remain firm, and bonded inventories are expected to see a slight destocking next week.

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