The Chinese spot price of 1# refined copper (Cu:≥99.95%) decreased by Yuan 167/tonne day on day to Yuan 68,704/tonne on January 4, according to Mysteel's assessment.
Specifically, spot prices of 1# refined copper in Shanghai under Mysteel's tracking decreased by Yuan 150/tonne day on day to average at Yuan 68,765/tonne, running in the range of Yuan 68,680-68,850/tonne. Moreover, its spot premium fell by Yuan 15/tonne day on day to a premium of Yuan 155/tonne.
Refined copper transactions heated up in East, North and Southwest China because downstream procurement demand picked up with falling copper prices. However, downstream enterprises in South China were cautious and maintained rigid demand procurement, so transactions remained flat. Specifically, during the early stage of trading, premium copper (e.g. 3C-P) and standard copper were sold quickly in the Shanghai market at a premium of Yuan 160-250/tonne and Yuan 130-140/tonne respectively. In the second trading session of the morning, some standard copper reached a premium of Yuan 180/tonne due to the supply shortage in the Shanghai market. As tomorrow approaches the weekend, downstream companies are expected to have certain purchasing demand. Therefore, it is estimated that premiums will perk up.
The transactions of refined copper rods further improved in East China but remained tepid in South and North China today. Post-holiday market recovery and falling copper prices today promoted trading in the East China market. According to Mysteel's survey, some medium-sized copper rod producers saw an increase in volume from yesterday to 1,000-1,500 tonnes. In contrast, the order volume of small-sized enterprises remained below the previous average. However, due to the diminished price advantage of finished products, the turnover in South and North China was less than 200 tonnes and about 500 tonnes respectively.
Secondary copper rod transactions in China worsened day on day as the price spread between refined and secondary copper rods narrowed. Some copper rod enterprises were trading with limited enthusiasm due to slower downstream pickups. According to Mysteel's survey, most processing enterprises in South China received under 100 tonnes of new orders today, or some even 0 tonnes.
Copper scrap transactions in China were muted today. Copper prices continued to fall, but the decline was not significant. Therefore, traders had insufficient confidence in market expectations and remained cautious about purchasing. In addition, upstream suppliers were reluctant to cut prices with weak trading willingness. Meanwhile, downstream enterprises had low enthusiasm for purchasing and selling when the profits of finished products were uncertain.
Written by Claudia Jin, jinzheyuan@mysteel.com
Edited by Paula Xu, xuzhongping@mysteel.com