Yangshan copper premiums still face pressure

Yangshan copper premiums with a quotation period in February stood at $53-63/mt under bill of lading during January 8-11, with the weekly average down $3.5/mt from a week earlier. Those stood between $55-70/mt under warrants with a quotation period in January, with the weekly average down $2.5/mt. Import premiums for EQ copper with a quotation period in February stood at $4-10/mt, cif, with the weekly average up $2.5/mt. As of 15:00 CST January 11, the SHFE/LME copper price ratio stood at 8.1, and import profit stood at around 158.77 yuan/mt.

The SHFE/LME copper price ratio recovered during the week. The import profit relative to the SHFE January copper contract exceeded 600 yuan/mt. However, the import profit against the February contract was only around 160 yuan/mt. Due to the rally of the SHFE/LME copper price ratio, cargoes under bill of lading arriving soon were desirable, thus bolstering import premiums. Buyers refrained from purchasing cargoes slated to arrive from the end of January to the beginning of February due to high costs arising from storage fees, box fees and capital costs during CNY holidays. Trades were tepid. In terms of warehouse warrants, offers rose amid improved SHFE/LME copper price ratio, but the actual traded import premiums were not high. Warrants for immediate delivery were limited amid low domestic social and bonded inventory. Most of the warrants being offered for sale were scheduled for delivery after the delivery of the SHFE front-month contract. Import premiums for high-quality pyro-copper stood at around $68/mt under warehouse warrants as of Thursday, and $61/mt for mainstream pyro-copper. Those for hydro-copper stood at $55/mt.

On the B/L front, premiums stood at $65/mt for high-quality copper, $58/mt for mainstream pyro-copper, and $52/mt for hydro-copper. Import premiums for EQ copper stood at $5-11/mt, cif, and averaged $8/mt.