LME Copper Premium Rises Sharply on Chinese Demand

SINGAPORE (Scrap Monster): London Metal Exchange (LME) Copper has attained a 2-week high supported by improved Chinese demand. Generally, April and May are considered to be strong months for consumption of copper by China on behalf of the brisk construction process. This has increased the gap, between front-month futures and spot copper rate in China to the highest level since 2010.

The three month LME copper contracts rose sharply to hit $6,696 during Thursday. April is considered to be strong month for copper demand in China as copper demand is picking up. The Limited supply of copper in the domestic market is also being cited a reason for the high premium. As per industry sources, many of the Chinese refineries are seen selling their copper to bonded ware houses. The China’s State Reserve Bureau had bought nearly 200,000 tonnes of imported copper from bonded warehouses during March-April.

A highest level of premium, of about 970 Yuan per ton was attained in Changjiang Metals Market, which was the peak level, not reached since 2010, said analysts. Also, copper that sold out in Shanghai market was also at a high rate of 48.280 Yuan per tonne on Thursday. It was 500 Yuan more than the price for copper futures based on Shanghai Futures Exchange.