PRICING NOTICE: Amendment of arbitrage calculation for copper, aluminium, zinc, nickel

Metal Bulletin is to update its formula for calculating the daily copper, aluminium, zinc and nickel arbitrage between the Chinese and global metals markets.

Metal Bulletin has amended the formula for calculating the daily arbitrage between China and the global markets for copper, aluminium, zinc and nickel.
China will cut value-added tax (VAT) on all imported goods by 1%, effective from May 1, the Finance Ministry and State Administration of Taxation said in a filing late on Wednesday April 4.
For metals, the rates will be cut to 16% from 17%, according to the announcement.
Therefore, Metal Bulletin will use the latest VAT of 16% when calculating the daily copper, aluminium, zinc and nickel arbitrage, instead of 17%, effective from May 2. May 1 is a holiday in China so no arbitrage will be calculated.
For copper: the formula consists of three parts:
a. SHFE front month contract close + spot premium/discount = China spot market price
b. (LME 3M + premium cif Shanghai) x 1.16% x forex rate + 200 yuan = cost for imported copper
c. The final import arbitrage result comes from (a minus b).
1. The copper premium cif Shanghai is the Metal Bulletin Shanghai cif daily copper premium. We also use the Metal Bulletin cif Shanghai premium for the aluminium arbitrage calculation, and the Metal Bulletin Shanghai warehouse premiums for zinc and nickel arbitrage calculations.
2. Spot premium/discount = average premium/discount of SHMET, a local metal website, whose figures are widely used for spot trading in China.
3. Forex rate: using Bank of China’s currency sell price, at or around 15:00 every day.
4. 200 yuan in part b refers to port charges including clearance costs, warehouse fees, etc.
5. We use LME 3M copper at 15:00 Beijing time.
6. We also include the Chinese import tax for the metals in the calculation. For copper and aluminium there is no import tax, but there is 1% for zinc and 2% for nickel.
The arbitrage aims to provide a general benchmark for the market because we understand different companies and deals will have different costs, among other variables.
Please contact us on if you have any queries regarding the arbitrage.
All historical data relating to this arbitrage will remain available in the pricing section of the Metal Bulletin website.
To provide feedback on this arbitrage calculation or if you would like to provide price information by becoming a data submitter, please contact Ellie Wang by email at: Please add the subject heading FAO: Ellie Wang, re: Arbitrage calculation.
To see all Metal Bulletin’s pricing methodology and specification documents go to
See also:
PRICING NOTICE: Arbitrage calculation for nickel changes on raised import tax
PRICING NOTICE: Improved arbitrage calculation for copper, aluminium, zinc and nickel [UPDATED]

Ellie Wang


Ellie Wang

April 12, 2018

10:50 GMT