China's copper CIF import trades stay thin on missing arbitrage

2015-11-06

Spot import trades for London Metal Exchange-registered brands of copper cathode on a CIF China basis stayed extremely thin on the dearth of buying interest as the arbitrage opportunity was absent, while offers remained under pressure on the prevailing weak demand, industry sources said Wednesday.

Platts lowered the CFR China copper premium assessment to $75-$85/mt Wednesday, down from $85-$95/mt last week.

"I'm hearing CIF China premiums at $70-$80/mt, down from $80-$90/mt last week mainly due the lack of buying interest as there's no arbitrage opportunity at the moment," said a north China-based analyst.

The price difference between CFR and CIF is negligible.

A north China-based source and a southwest China-based trader also heard import premiums slipping to $70-$80/mt this week, while an east China-based source heard premiums at $70-$85/mt.

"It's a quiet market. There's still an import-related loss of around Yuan 300/mt ($47/mt) now. The import premiums have been on a downward trend due to the lack of arbitrage opportunity," the northern Chinese source added.

The southwestern Chinese trader said that the Chinese domestic demand was was extremely weak due to the weak Chinese economic outlook.

"The import premiums have been slipping steadily below $100/mt after the surge in import in September due to arbitrage opportunities during then. This week, I'm hearing premiums at $70-$85/mt, down from around $90/mt last week," added the eastern Chinese source.

An Asian trader, however, said that he had heard premiums at $80-$85/mt, down from $80-$95/mt last week.

"Premiums are still falling as there's no demand due to the lack of arbitrage opportunity. However, I haven't heard $70/mt. I think it's too low," the Asian trader added.

Sources added that the LME three-month copper price gained last night on higher crude oil price but Chinese domestic prices were slow to react.

The Chinese spot copper price stood at Yuan 38,660-38,710/mt ($6,102-6,110/mt) Wednesday, compared with Yuan 38,680-38,720/mt Tuesday and Yuan 39,070-39,120/mt last Wednesday, according to state-owned non-ferrous metals information division Beijing Antaike.

Front-month November copper futures closed at Yuan 38,900/mt on the SHFE Wednesday, compared with Yuan 38,560/mt Tuesday and Yuan 38,920/mt last week.

The LMESelect 3 month price for copper was at the $5,180/mt level on Wednesday afternoon, while the LME official 3 month price was $5,127-$5,127.50/mt on Tuesday.

Chinese spot copper concentrate treatment and refining charges (TC/RCs) remained steady at $100-105/mt and 10-10.5 cents/lb respectively, unchanged from the previous week, industry sources said.

TC/RCs -- fees charged to miners by smelters to treat and refine copper concentrate to produce copper metal -- typically rise when concentrate supply is ample and fall when supply is tight.

Source from : Platts

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