GLOBAL COPPER WRAP: Shanghai cif premium recovers slightly; US premium ticks up on higher freight rates, strong contango

The persistent decline seen in the cif Shanghai copper premium came to a halt this past week after participants refused to sell any lower following earlier sell-offs, while others are gradually taking leave of the market ahead of the Chinese New Year holidays, limiting trading activity.

  • Cif Shanghai copper premium rebounds slightly from last week’s almost three-year low.
  • Freight rate increase, strong contango on the London Metal Exchange boosts US copper premium.
  • European copper premiums unchanged in quiet physical market.

The cif Shanghai copper premium rebounded slightly in the week ended Tuesday January 14 after tumbling to its lowest level in almost three years in the week prior amid sell-offs at the end of 2019, a lack of demand and poor arbitrage conditions.
Fastmarkets assessed the copper grade A cathode premium, cif Shanghai at $35-50 per tonne on Tuesday. This is up by $2 per tonne from $33-48 per tonne on January 7, the lowest since March 2017 basis the midpoint.
“The rally is reasonable as traders are now focusing on cathodes that will arrive after the Chinese New Year holiday (January 24-30),” a Shanghai-based trader told Fastmarkets.

“Offers are up for material arriving after...

Published

Hassan Butt

Rijuta Dey Bera

Sally Zhang

January 15, 2020

07:25 GMT

London, Shanghai, New York