GLOBAL COPPER WRAP: LME price woes push arbitrage to bolster Shanghai premium; Europe, US flat

The Shanghai grade-A copper premium increased in the week to Tuesday March 10 on improved arbitrage opportunities following a sharp drop in London Metal Exchange copper earlier in the week, while markets participants in Europe and the US struggle against robust copper cathode availability.

  • Shanghai market participants capitalize on import arbitrage opportunities
  • LME warrant availability hampers dip-buying in Europe
  • High-grade copper scrap offsets US cathode appetite
Shanghai copper premiums rise on arb dealing
The Shanghai copper premiums, both on cif and in-warehouse basis, rose in the week ended on Tuesday March 10, due to higher arbitrage deals, Fastmarkets learned.
Fastmarkets assessed the copper grade-A cathode premium, cif Shanghai at $50-65 per tonne on Tuesday, up by $4 per tonne at the mid-point from $45-62 per tonne a week prior.
“I did arbitrage deals on Monday morning after LME copper collapsed, creating opportunities for arb trades,” a Shanghai-based trader said.
“The increase [in premiums] is because of the arb deals and has little relation to purchases from downstream plants, [and] they are still recovering,” a second trader in Shanghai added.

The loss...


Hassan Butt

Rijuta Dey Bera

Sally Zhang

March 11, 2020

13:05 GMT

London, Shanghai, New York