COPPER SNAPSHOT: Focus on markets rout; Shanghai, Korea copper premiums rise slightly

Key data from July 9 pricing session.

Key data from July 9 pricing session.

Shanghai in-warehouse premium
Today Yesterday July 2     Today's weighted average Yesterday's weighted average July 2 weighted average
60-75 60-75 50-70 66.67 67.5 59.33
Shanghai cif premium
Today Yesterday July 2   Today's weighted average Yesterday's weighted average July 2 weighted average
60-75 60-75 50-70 66.11 67.5 56.86


Singapore in-warehouse premium
This week Prior week This week's weighted average premium Last week's weighted average LME stocks as of July 9 (tonnes) LME stocks as of July 2 (tonnes) LME stocks as of June 9 (tonnes)
15-25 15-25 18.33 19.17 18,225 18,375 18,475
Johor in-warehouse premium
This week Prior week This week's weighted average premium Last week's weighted average LME stocks as of July 9 (tonnes) LME stocks as of July 2 (tonnes) LME stocks as of June 9 (tonnes)
15-25 15-25 18.33 19.17 77,450 77,450 77,725
South Korea cif premium
This week Prior week This week's weighted average premium Last week's weighted average LME stocks as of July 9 (tonnes) LME stocks as of July 2 (tonnes) LME stocks as of June 9 (tonnes)
55-70 55-65 64.17 60.63 41,800 41,800 40,650


Key drivers:
-Focus on recent crash in copper prices on back of Chinese stock market rout
-Shanghai premiums rise slightly week-on-week as arbitrage opportunity opens
-Fundamental still weak in China; no major uptick in demand
-South Korea cif premiums edge up on the back of Shanghai premiums rising and warehousing incentives
-Singapore and Johor premiums unchanged in a quiet market

Key quotes:
“Physical demand for copper is not good. [There is] more concern on stock markets these days. The recent central government policies seems to work today on stock markets.”
-Shanghai-based trader

“The Shanghai equity market is very hot. All commodities [have] dropped a lot in the last few days. Today the equity market has stabilised so commodities [will] rebound. We saw some clients buy LME copper and sell into [the] SHFE market.”
-China-based trader

Domestic premiums are up 100 RMB to 200-220 RMB in the past week, and this combined with positive arbitrage between the two markets brings some opportunity for China imports.

“The [Chinese] market is very well-stocked, demand is not good. [We] recently did Shanghai in-warehouse deals at $70 per tonne premium for good LME brands. The domestic market premium [in Shanghai] is good, so there are enquiries for immediate imports.”
-Third Chinese trader

“Normally when SHFE falls below 40,000 RMB Chinese smelters don’t want to sell."
-Smelter source

“Spot market is tight in China as Chinese smelters don’t want to sell at this price.”
-Shanghai-based trader

South Korea is still very quiet for copper business. [There have not been many] transactions as end users have enough stocks. LME warehouse incentives are at $70-75 per tonne.
-Seoul-based trader

“Copper warrants premium [remains] unchanged for Singapore/Johor as interest died down somewhat, even though the LME/SHFE arbitrage is reasonably open, averaging $20/mt profit for the past week. Traders [are] citing weaker market and hassle of physical transaction… We saw large drawdowns in SHFE copper warrants, down 33,299 tonnes in the past 3 weeks, reflecting a tighter domestic market.
-Broker Triland in a note to clients

See also:
Key data from July 2 and June 25 pricing.
South Korea PPS stockpiles copper at Incheon port at $72-75 per tonne premium.
Rolling LME/SHFE report.

Shivani Singh 
shivani.singh@metalbulletinasia.com 
@ShivaniSingh_MB

Recent Base Metals News

Editor's pick