Shanghai copper premiums down further, bonded stocks rise

Shanghai copper premiums dipped further after the Tomb-Sweeping holiday amid sluggish sentiment, as bills of lading cargoes which had failed to be sold out before arriving were transferred to China’s bonded warehouses.

Shanghai copper premiums dipped further after the Tomb-Sweeping holiday amid sluggish sentiment, as bills of lading cargoes which had failed to be sold out before arriving were transferred to China’s bonded warehouses.

The most recent assessments and offers were quoted in the range of $50-70 per tonne on an in-warehouse basis in Shanghai on Thursday March 9, down $5 per tonne from Metal Bulletin sister publication Copper Price Briefing’s assessment a week ago.

Premiums for ocean cargoes were quoted in the same range this week, also down $5 per tonne from Copper Price Briefing’s assessment last week.

Arbitrage this week saw an improvement from before the holiday, although that did not encourage buyers to place orders, said market participants.

Import losses this week were around 1,000-1,200 yuan ($163-196) per tonne, compared with over 1,500 yuan per tonne last week, according to Copper Price Briefing’s calculations.

“Small factories have been the main factor behind worse demand this year. Orders from big factories show little change from a year ago, but many small ones have delayed their starting date over and over this year,” said a Shanghai-based trader.

Narrowed interest rate spreads and difficulties in opening letters of credit continued this week, resulting in less imports and rising stocks in bonded warehouses.

“I have stopped quoting ocean cargoes these days, as I already have sent some cargoes to the warehouse and have got warrants in hand now,” said a second trading source.

More ocean cargoes that failed to be sold out before arriving were transferred to bonded warehouse, she added.

According to market sources, about 50,000 tonnes of stocks have been added at bonded warehouse during the past month, with stock levels now at around 600,000-620,000 tonnes.

High long-term premiums impact

Late last year, Metal Bulletin reported that Chinese buyers had reduced their long-term contract volumes because of the big gap between spot and long-term offers. Codelco’s benchmark premiums were set at $133 per tonne for 2015, while Chinese smelters offered $128 per tonne.

Less bookings on the long-term side mean more material is now being offered in the spot market, which has burdened the supply side, said a third Chinese trader.

“Shanghai premiums climbed a bit after the Chinese New Year holiday, as hopes on the [government] policy side made many people think Chinese demand would pick up soon. That encouraged trading houses to place orders at that time, as a result of which we now see more cargoes here,” he said.

Kiki Kang
kiki.kang@metalbulltinasia.com
Wechat: KikiKang_MB

What to read next
Quarterly figures released by global miner Glencore on Wednesday October 30 showed that zinc concentrate output was dropping in a tight market while overall nickel output was down despite an increase in briquettes.
On Thursday October 24, the US Department of Treasury and the Internal Revenue Service (IRS) released the final rules regarding the Section 45X credits under the US Internal Revenues Code. The final rules clarify definitions and confirm credit amounts for eligible components, including solar and wind energy, inverters, qualifying battery components and applicable critical minerals. […]
Nickel premiums remained stable worldwide, with the London Metal Exchange's three-month nickel price hitting its lowest point since mid-September.
Imports of cobalt intermediates have continued to rise in China, with January-September volumes already exceeding that of the entire previous year. This excessive inflow has led to an enduring oversupply in the domestic cobalt market, sources have told Fastmarkets
Market participants disagreed over the cause of the long queues to withdraw aluminium from London Metal Exchange-registered warehouses at Port Klang in Malaysia, Fastmarkets heard on Thursday October 17
Copper concentrate treatment charges (TCs) are expected to remain low in 2025, with the market likely to remain tight, sources from across the industry told Fastmarkets.