Spot copper was quoted with premiums of 0-200 yuan/mt, or an average premium of 100 yuan/mt last Friday, up 240 yuan/mt from May 12. Last week, the inventory of mainstream copper social warehouses in Tianjin fell 500 mt as the drop in copper prices in the first half of the week boosted downstream purchasing sentiment.
In the first half of the week, the premiums in north China rose and averaged 170 yuan/mt on Thursday, the highest this year. The main reason is that the copper price hovered at a low level and downstream buying interest improved.
Downstream buyers preferred to buy copper cathode due to narrower price spread between copper cathode and copper scrap. The significant increase in demand resulted in tighter supply. Therefore, spot premiums jumped. After spot premiums rose to a high level, there were few trades. Spot premiums pulled back on Friday. This week, with the outflow of warrants after delivery, and arrivals of imported copper, the shortage of goods will ease, and the premiums in north China may fall.
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