GLOBAL COPPER WRAP: Shanghai premiums slip after hitting 2015 highs, consumption lags elsewhere

China remained the focus of global copper cathode trading over the past week, with premiums there rising to the highest level since 2015 before easing on Tuesday. Elsewhere, the market is still waiting for a full return of manufacturing in the United States and major European economies after the Covid-19 lockdowns.

  • Cathodes trade at $120-per-tonne premium cif and bonded Shanghai
  • Deliveries continue into LME warehouses
  • US, European demand sluggish
Copper cathode premiums break fresh highs in Shanghai
Copper cathode premiums in Shanghai rose to their highest level in four-and-a-half years with traders profiting from a significant arbitrage between London Metal Exchange and Shanghai Futures Exchange prices.
Deals for May-June arrival cif cargoes and for bonded stocks of copper cathode were concluded at premiums of up to $120 per tonne, the highest level since September 2015.
The surge in spot premiums, which have more than doubled since the start of the year, comes as bonded stocks of copper cathode fall in Shanghai.
Fastmarkets assessed Shanghai bonded copper stocks at 250,000-260,000 tonnes on May 18, down by 13.9% from 291,000-301,000 tonnes on May 4 and close to a 2015 low.

But the soaring premiums became unpalatable to buyers...

Published

Archie Hunter

Hassan Butt

Rijuta Dey Bera

May 20, 2020

10:18 GMT

London, New York