Amendment to Fastmarkets’ copper arbitrage calculation on July 15

The Shanghai Futures Exchange copper price used in Fastmarkets’ base metals arbitrage calculation on Friday July 15 has been amended due to an unprecedented market change.

Fastmarkets uses the closing prices for copper, aluminium, zinc and nickel on the SHFE front-month at 3pm Shanghai time in its daily base metals calculations.

On July 15 – the final trading day of the July contract – the price of the SHFE July copper contract flipped from down 5% to up by more than 5% in less than an hour. The closing price for the 2207 contract was 58,760 yuan per tonne.

Using this closing price in the calculation of the would generate to a significant arbitrage gain, which would be at odds with the current market outlook – one characterized by lackluster interest in importing copper cathodes. The arbitrage window remains closed for many of the major market participants that Fastmarkets speaks to during the day’s pricing window.

Editorial judgment has been applied to use the closing price for the SHFE August copper contract on the day in the arbitrage calculation.

The two affected prices are:
MB-CU-0362 Copper import arbitrage, yuan/tonne – which was published at -392.68 yuan per tonne.
MB-CU-0361 Copper import arbitrage, $/tonne – which was published at -$57.89 per tonne.

To provide feedback on this price or if you would like to provide price information by becoming a data submitter to this price, please contact Julian Luk by email at: pricing@fastmarkets.com. Please add the subject heading “FAO Julian Luk re: copper arbitrage.”

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