GLOBAL COPPER WRAP: Shanghai premiums fall on negative import arbitrage; US premium stays at multi-year high

The Shanghai copper cathode premiums dipped on Tuesday November 6 due to a sustained import loss and wide backwardation in the London Metal Exchange forward spread, while the US premium was steady at a multi-year high with eyes on long contract negotiations.

Shanghai cif premiums were slightly lower due to import arbitrage loss, a backwardation in the nearby spread and a big delivery into LME warehouses; the rest of Asia was stable.  Italian premium softens on slack demand and with tight supply easing.  US premium stays at multi-year high. Negative arbitrage, wide backwardation dampen activity Fastmarkets’ cif Shanghai and in-warehouse Shanghai premiums both were lower week on week on Tuesday mainly due to a closed copper import arbitrage window and a wide backwardation in the LME cash/three-month spread. Fastmarkets assessed the Shanghai copper premium on a cif basis at $80-100 per tonne on Tuesday, compared with $85-105 per tonne a week prior. The Shanghai copper bonded warrants premium was $95-110 per tonne on Tuesday, compared with $100-115 per tonne. A cumulation of factors are weighing on demand, with trading volume thinning in the past week. There has been a sustained negative arbitrage between...

Published

Ellie Wang

Archie Hunter

Dalton Barker

November 07, 2018

10:04 GMT

London, Chicago, Shanghai