Spot quotes in north China edged down initially before rising last week, with the average lower than the prior week. Spot copper was quoted with premiums of 70-190 yuan/mt, or an average premium of 130 yuan/mt, down 130 yuan/mt from Wednesday June 21.
Spot premiums in north China fell sharply with Shanghai prices after the Chinese Dragon Boat Festival holidays. There were large influx of low-priced cargoes from Shandong into the north China market early alst week. And some sellers lowered prices due to the need to generate cash.
However, supply in north China remained tight due to maintenance of major smelters. Meanwhile, rising backwardation of the SHFE front-month contract over the SHFE next-month contract boosted confidence of sellers, raising spot premiums. The maintenance of smelters in north China has not ended, and the operating rates of copper rod plants using copper cathode will rise amid the narrower price spread between copper cathode and copper scrap. In this scenario, spot premiums can hardly fall this week.
