GLOBAL COPPER WRAP: Shanghai premium rises again on expectations of VAT cut

Copper cathode premiums were unchanged across Europe and the United States this week amid continued uncertainty over the global economic impact of the Covid-19 outbreak, but the cif Shanghai premium rose once again in anticipation of a value-added tax cut in China.

  • Chinese market participants scramble to buy cargoes for nearby delivery.
  • Spot business dries up in Europe and the US.
  • US market participants brace for dual supply/demand impact.
Shanghai cif premium hits $80/t as Chinese participants bet big on VAT cut
Copper cathode premiums in Shanghai rose sharply on Tuesday April 7, with the increase coming while Chinese market participants scrambled to secure cargoes for nearby delivery.
Fastmarkets assessed the copper grade A cathode premium, cif Shanghai at $63-80 per tonne on Tuesday, up by $10-12 per tonne from $53-68 per tonne a week earlier.
Premiums for cathodes in Shanghai's bonded zone are currently as high as $82 per tonne, with buyers valuing proximity and guarantee the units will be importable into China at a greater premium than seaborne cargoes.

Buyers are hoping for a cut to VAT to be announced when China's National People's Congress...


Archie Hunter

Hassan Butt

Rijuta Dey Bera

April 08, 2020

05:07 GMT

New York, London, Shanghai