Spot Premiums In Guangdong Copper Market Continued To Fall

Last week, spot premiums trended lower. Sellers lowered spot premiums to generate cash, while downstream buyers refrained from buying in large volumes amid cash flow issues, muting trades. As of Friday June 30, high-quality copper was quoted with premiums of 70 yuan/mt, down 190 yuan/mt from June 21. Standard-quality copper was quoted with premiums of 60 yuan/mt, down 190 yuan/mt. Hydro-copper was quoted with premiums of 10 yuan/mt, 190 yuan/mt lower than pre-holiday levels.

Last Friday, the prices in Shanghai exceeded those in Guangdong by 290 yuan/mt. The price gap was large so that there was no opportunity for cargo transfer between the two regions. As of Friday June 30, total inventories in Guangdong stood at 28,800 mt, an increase of 300 mt from June 21. Arriving shipments between June 22 and June 30 stood at 21,200 mt, slightly higher than the weekly average of 19,000 mt for 2022. Most of the shipments arrivals were domestic copper.

Shipments leaving Guangdong stood at 20,800 mt, slightly higher than the weekly average of 19,500 mt for 2022. As many end-user plants maintained low operating rates during and after the Dragon Boat Festival holidays, shipments did not increase noticeably.

This week, the total supply will decline in view of a small inflow of imported copper and fewer shipments arrivals of domestic copper. The demand is expected to increase after the completion of mid-year settlement. Inventory will fall and spot premiums should rise.