Firm spot premiums hinder refined copper trading in China

China's 1# refined copper spot price stood at Yuan 101,286/tonne on March 11, rising slightly by Yuan 17/tonne compared with the previous trading day, according to Mysteel's assessment. Specifically, spot prices in Shanghai ranged between Yuan 101,120-101,500/tonne, averaging at Yuan 101,270/tonne. The 1# refined copper average spot premium in Shanghai was Yuan 30/tonne, rising by Yuan 45/tonne day on day. Following Monday's sharp decline, copper prices rebounded during the week due to fluctuations in macroeconomic sentiment. However, with the near-month Contango structure showing a wide spread, spot premiums remained firm in China.

Mysteel's survey covering 56 refined copper trading enterprises (including traders, smelters, and downstream fabricators) in China indicated that the daily spot transaction volume totaled 33,000 tonnes on March 11, dropping by 3,200 tonnes or 9.02% day on day. Elevated copper prices and premiums constrained downstream enterprises' purchasing willingness, leading to a slight slowdown in trading activity in China's refined copper market.

Regarding raw material markets, Mysteel's treatment charge (TC) for standard clean copper concentrate dropped by $1.2/dmt day on day to -$57.2/dmt on March 11, indicating the persistent supply tightness. Concerning copper scrap, China's daily copper scrap spot transactions was 3,684 tonnes on March 11, declining by 782 tonnes or 17.51% day on day, but stayed at an acceptable level. Despite recent changes in tax policies affecting the copper scrap market, trading activity remained relatively robust, primarily due to tight supply which prompted holders to sell at high prices to lock in profits, coupled with increased raw material demand from downstream enterprises as they resumed operations.

China's copper semis markets were dominated by long-term orders amid volatile raw material prices. Mysteel's 31 Chinese copper rod sample manufacturers with a total annual capacity of 6.01 million tonnes and 6 sample traders reported that order volumes decreased by 1,700 tonnes or 17.46% day on day, reaching 7,900 tonnes on March 11, with refined copper rod transactions falling by 700 tonnes or 9.96% to 6,000 tonnes, and secondary decreasing by 1,000 tonnes or 34.97% to 1,900 tonnes. Rising prices generally dampened spot orders in copper semis markets, except for the copper tube sector, where downstream enterprises stepped up procurement in fear of further rebound in prices. Meanwhile, refined copper rod producers controlled new order intake, prioritizing the fulfillment of current orders.

Looking ahead, China's copper prices are expected to fluctuate at a high level in the short term, with macro uncertainties, demand growth in the upcoming peak season, and inventory trends serving as major drivers.

For more in-depth insights, long-term outlook, and comprehensive data on China's copper market, subscribe to Mysteel Copper Weekly, Mysteel Copper Monthly, and Mysteel Copper Database.

Written by Mingyuan Wang, wangmingyuan@mysteel.com 

Edited by Ruolan Chen, chenruolan@mysteel.com