Large Outflow of Warrants Restrained the Premiums from Rising in South China Copper Spot Market

Today, 1# copper cathode spot in Guangdong was quoted with premiums of 0-60 over the current month contract. The average price was premiums of 30 yuan/mt, up 5 yuan/mt from the previous trading day. The quotations of hydro-copper were discounts of 50/mt- premiums of 40 yuan/mt. The average discount was 45 yuan/mt, flat from the previous trading day. The average price of #1 copper cathode was 71,990 yuan/mt, up 170 yuan/mt from the previous trading day, and that of hydro-copper was 71,915 yuan/mt, up 165 yuan/mt.

In the spot market, inventory in Guangdong have declined for five days, which was mainly caused by a significant decrease in recent arrivals and a good shipment. However, the outflow of warrants was too large. The warrants decreased by 3,368 mt yesterday, and 40,500 mt are still waiting to be released. Thus, the premiums decreased today. As of 11:00 today, spot premiums for high-quality copper were 60 yuan/mt, that of standard-quality copper stood at 0 yuan/mt, and that of hydro-copper was quoted with discounts of 50 yuan/mt.

In general, the large outflow of warrants restrained the premiums from rising. The release of warrants next week is of utmost concern. SMM expects that the premiums will likely continue to rise against the continuous decrease in inventories.