China copper: Low LME prices spur higher import premiums

Tokyo (Platts): London Metal Exchange copper prices falling below $5,000/mt this week have spurred spot buying among Chinese traders and consumers, causing premiums for imports into China to rise, market sources said Wednesday.

Platts assessed spot Chinese import premiums for LME-registered grade A copper cathode at $90-$100/mt plus LME cash CIF Shanghai Wednesday, up from $85-$100/mt a week ago.

A South Korean trader said he has done spot sales for 200-1,000-mt lot sizes, to Chinese traders as well as to consumers, at $95-$100/mt plus LME cash CIF Shanghai.

Cargoes are for prompt loading for delivery to buyers in September, he said. There are inquiries for October too, but most buyers are seeking for September, he added.

A Japanese trader said a Chinese trader agreed to $88/mt plus LME cash CIF Shanghai for a 500-mt lot for prompt loading. But the deal did not close due to technical issues not related to prices, he said.

A Chinese trader said he has been hearing higher prices at $100-$150/mt plus LME cash CIF Shanghai.

Spot import demand has increased as a result of LME copper prices being lower than Shanghai Futures copper prices and limited copper availability from bonded warehouses in Shanghai, traders said.

Shanghai Futures front-month copper traded at around Yuan 39,310/mt ($6,151/mt), while the LME three-months hovered in the range of $5,008-$5,011/mt during Asian trading hours Wednesday.

"The import opportunities may be disappearing soon because LME copper prices may be at bottom," said the Chinese trader.

Courtesy : Platts