Shanghai premiums dipped due to wider import loss and tighter credit
- Cif Shanghai premium narrows after import arbitrage loss between London and Shanghai widens
- Narrowing contango in London Metal Exchange forward spreads and tighter credit weaken trader confidence in holding onto the red metal
- Slack demand leaves copper premiums flat in Italy, the US
Copper premiums for Shanghai on both cif basis and on bonded warrants basis dipped on Tuesday July 2 due to a widening import arbitrage loss between London and Shanghai and a narrowing contango in the cash/three-month copper spread since late June, as well as a tightening in credit issued by banks in the middle of the year.
Fastmarkets assessed the premium for grade-A copper cathode at $52-68 per tonne cif Shanghai on Tuesday, with the lower end of the range down by $2 per tonne from $54-68 per tonne a week earlier.