Yangshan Copper Premiums Can Hardly Rise

Last week (July 17-July 21), the average price range for warrants of Yangshan copper premiums was $34-47/mt for QP August, with a decrease of $5/mt compared to the previous week. The bill of lading prices were in the range of $34-46/mt, with an average decrease of $8/mt for QP August contracts. As of the closing time on July 21 at 15:00, the SHFE/LME copper price ratio was 8.07, and the import losses against the SHFE copper 08 contract was 685.83 yuan/mt.

The price ratio showed signs of recovery during the week, but it remained in the loss zone. As for the bill of lading, forward arrivals still maintained strong offers, while the premium for cargoes arriving soon faced downward pressure. The market trading volume was extremely low, leading some state-owned sellers to store their goods in bonded warehouses. However, most sellers were concerned about the high cost of storage, which forced them to lower prices for bill of lading. Additionally, the recent issue about Chalco has to some extent restrained the trading market's activity.

As of last Friday, traded import premiums for high-quality pyro-copper currently were around $44/mt under warrants, and $37/mt for mainstream pyro-copper. Those for hydro-copper were $31/mt. On the B/L front, premiums were $42/mt for high-quality copper, $35-36/mt for mainstream pyro-copper, and $30/mt for hydro-copper.

Currently, the copper import market has fully entered a buyer's market characterized by oversupply. The volume of customs clearance is gradually declining, and the premiums in the domestic spot market has dropped. In east China, processing fees for copper cathode rods have seen rare consecutive downward adjustments, indicating a slight weakening in downstream consumption. Yangshan copper premiums are expected to fall.

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