Smelters in China, the world’s largest copper consuming country, are said to have been exporting tens of thousands of tonnes of cathodes into Shanghai’s bonded warehouses over the past two weeks before shipping further afield.
Three individual plants have exported at least 70,000 tonnes of Grade-A copper cathodes combined to the Shanghai-bonded zone and abroad, informed sources at Chinese smelters confirmed to Fastmarkets.
Chinese smelters and traders are taking advantage of an export arbitrage that has opened up due to a squeezed LME contract soaring to a 7-month high, while the Chinese SHFE market reflects lower demand expectations.
Copper exports from China are an unusual if not unprecedented phenomenon, but the fact that there is potential for such volumes to move could be a signal that copper’s current bull run could soon run out of steam.
“It’s kind of a bear market rally, I think it’s very hard to have a sustained rise in...