Chinese spot CIF import premiums for London Metal Exchange-registered brands of copper cathode remained steady amid marginal sideways movements, industry sources said Wednesday
Import premiums remained around $200/mt CIF China Wednesday, similar to those heard the previous week.
Platts assessed its weekly CFR China copper premiums at $170-190/mt plus LME cash price Wednesday, unchanged from last week.
The price difference between CIF and CFR is negligible.
"Imports premiums have remained steady around $190/mt, while China's domestic demand has generally stayed steady," said a north China-based source. A Southeast Asian trader, who sells to Chinese buyers, said: "Export premiums were still around $200/mt this week, unchanged from last week. There's also no change in demand." "In fact, the import premiums have been holding steady at $180-205/mt for the past two to three months, seeing an occasional plus or minus $5/mt movement," said an east China-based analyst said.
Sources noted that the import-related loss due to the price difference between the LME and Shanghai had dropped this week to around Yuan 1,000/mt ($164/mt) this week from Yuan 1,500/mt last week.
"The more stringent credit requirement has made borrowing from bank very difficult. Some market participants have turned to importing to resell in China and in order to get cash to use for other investments," the eastern Chinese analyst added.
Sources added it might be a bit too early to stock up in view of the volatile copper prices.
"Probably, we will see a pickup in buying in December, when it is nearer to the Lunar New Year [for 2014]," the eastern Chinese analyst added.
China will be official closed for a week from January 31, 2014 for the Lunar New Year. Up to two weeks prior to that, workers will leave for the hometown for a reunion with their families for the festival.
Copper stocks continued to rise for the fourth week in a roll in Shanghai Futures Exchange. Inventories gained 3.6% week on week to 178,343 mt on last Friday, data from SHFE showed. Chinese domestic copper prices slipped, tracking weaker LME prices in view of losses on Wall Street on upbeat US service sector data, which has added to speculation that the Federal Reserve will soon start reeling in its stimulus. The Chinese domestic spot copper price was around Yuan 51,625/mt Wednesday compared with Yuan 51,960/mt last Wednesday. November copper futures closed at Yuan 51,730/mt on the SHFE Wednesday compared with Yuan 52,290/mt last week.
On Tuesday, the official LME cash price for copper stood at $7,215-7,215.50/mt, compared with $7,285-7,260/mt last Tuesday.
Meanwhile, Chinese spot copper concentrate treatment and refining charges, or TC/RCs, remained on an update trend, Chinese sources said.
"In November, we heard TC/RCs at $100-110/mt and 10-11 cts/lb, respectively, up from $90-100/mt and 9-10 cts/lb in October and $80-90/mt and 8-9 cts/lb in September," said the eastern Chinese analyst.
The northern Chinese source, who heard spot TC/RCs in excess of $100/mt and 10 cts/lb now, added: "TC/RCs have been on an upward trend on the back of increased supply in the near future."
Sources added they had not heard any further updates on the annual 2014 TC/RCs talks but reckoned the level would be higher than those settled for 2013 in view of the anticipated increase in concentrate supply in 2014.
Japanese Pan Pacific Copper's term TC/RC levels for 2013 were settled at around $70/mt and 7 cents/lb, while Hong Kong-listed Jiangxi Copper had signed the 2013 TC/RCs with Freeport McMoRan Copper and Gold at $70/mt and 7 cts/lb respectively.
