Spot import premiums for London Metal Exchange-registered brands of copper cathode on a CIF China basis slipped for a second consecutive week, dampened by persistently weak physical buying interest during the current summer lull, market sources said Wednesday.
Platts assessed weekly CFR China copper premiums at $80-105/mt Wednesday, down from $90-110/mt last week.
A Southeast Asian trader lowered his export premiums by $5/mt to $95-100/mt CIF China, while a second Southeast Asian trader indicated export premiums at $80-100/mt CIF, from $100/mt last week.
The price difference between CFR and CIF is negligible.
"Even at [an export premium of] $80/mt, there are no buyers [which are mainly from China]. These buyers can't get the letter of credit from banks to import due to more stringent credit rules following the Qingdao port probe," the second Southeast Asian trader said.
The first Southeast Asian said there were no arbitrage opportunities as the price gap between LME and Shanghai prices were quite narrow.
Chinese copper importers are mostly traders who keep a close watch on LME and domestic copper prices for arbitrage opportunities.
An east China-based analyst said: "The import-related loss for Chinese imports are around Yuan 1,000/mt ($163/mt) this week, compared with around Yuan 500/mt last week, prompting caution among market participants."
The analyst said he had heard import premiums at $90-105/mt, down from $95-115/mt last week.
"In addition, market participants are also adopting a 'wait-and-see' approach, awaiting Chinese import/export statistics for July due this week," the analyst said.
China's copper stocks have slipped below the 100,000 mt mark in Shanghai Futures Exchange warehouses, with stocks falling two weeks in a row.
Stocks stood at 96,853 mt Friday, down 4.1% week on week, the latest weekly data from the exchange showed.
Despite the fall, sources said current SHFE copper stocks had remained high, exerting pressure on domestic prices and keeping them around the Yuan 49,000/mt level.
Sources said weaker LME copper prices had also kept Chinese domestic prices in check.
Front-month September copper futures closed Wednesday at Yuan 49,800/mt on the SHFE, up only slightly from Yuan 49,630/mt last week.
Chinese domestic spot copper was around Yuan 49,605/mt Wednesday, down from Yuan 50,195/mt Wednesday.
The LME official cash price for copper stood at $6,934-6,934.50/mt Tuesday compared with $7,025-7,025.50/mt a week ago.
Meanwhile, Chinese spot copper concentrate treatment and refining charges (TC/RCs) remained steady at $100-110/mt and 10-11 cents/lb, respectively, unchanged on the 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.
