Yangshan Copper Premiums To Fall This Week Due To Concentrated Arrivals

Yangshan copper premiums with a quotation period in June stood at $30-45/mt under warrants during May 22-26, with the average up $2.5/mt from a week earlier. Those stood between $47-62/mt under bill of lading with a quotation period in June, with the average up $2/mt. As of May 26, the SHFE/LME copper price ratio stood at 9.02, and import profit stood at 548/mt.

Yangshan copper premiums under bill of lading rose further. Specifically, the theoretical profit of spot imported copper in Shanghai was basically stable above 400 yuan/mt, which stimulated the rise in both volume and price of Yangshan copper warrants, but the rise in premiums was significantly slower than that of trading volume. Due to the weak financing attributes of warrants and the high cost of carrying them, and buyers’ expectation that domestic premiums will hardly rise sharply in the market outlook, the rise in premiums was mild. There will be massive port arrivals at the end of May, mostly Russian copper, which is expected to be directly digested by the downstream buyers. This may slightly weigh on Yangshan copper premiums.

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