The effect of several smelter disruptions in 2018 will be sustained into first half of 2019, Ju said. Meanwhile, he expects stronger demand for imported refined copper in 2019 after the ban of category 7 scrap imports comes into effect from the beginning of 2019. Separately, the Chinese government is very likely to mitigate recent financial difficulties for private enterprises, he added.
These three factors support a relatively positive outlook for the refined copper premium cif Shanghai in the first half of 2019, Ju said.
Fastmarkets’ average spot copper premium cif Shanghai for the first half of 2018 stood at $65.70-79.50 per tonne, while Codelco’s benchmark premium cif Shanghai for 2018’s annual long contract was at $75 per tonne.
“The benchmark premium of $88 per tonne between Codelco and Chinese long contract buyers is very modest given several copper smelters suspended production in the second half of 2018,” Ju said....