A fall in the value of China's currency against the dollar has increased the losses incurred by the country's copper importers in May, Chinese industry sources said Thursday.
The US dollar was trading at Yuan 6.26 Thursday, compared with Yuan 6.23 at end April.
Losses for spot imports of copper were averaging Yuan 1,800/mt ($289/mt) in May, up from Yuan 1,000/mt in April, according to Minmetals Futures' monthly commodities reports. The May report was released Wednesday.
The continued weakening of the Yuan has kept copper import premiums high, widening the SHFE-LME arbitrage ratio, according to the Administration of Customs.
"The weaker Yuan has pushed up premiums for imported copper, boosting losses for the imported copper trade," said Jack Yeung, a business professor at the City University of Hong Kong.
CIF Shanghai premiums for LME-registered copper stood at $110-125/mt Thursday, China (Shanghai) Pilot Free Trade Zone Administration data showed, up from $90-110/mt in mid-April.
Chinese metals consultancy Beijing Antaike in a commodities report in January forecast China's refined copper imports at 2.9 million mt in 2014, down 8.5% from 2013; its refined copper output at 6.9 million, up 11% year on year, and domestic copper consumption at 8.75 million mt, up 6.7%.
