China copper: CIF import trades continue to dwindle as buying thins out
Source: www.chinamining.org Citation: Platts Date: September 17, 2015
Spot import trades for London Metal Exchange-registered brands of copper cathode on a CIF China basis continued to dwindle as buying interest thinned out with the arbitrage window closed, industry sources said Wednesday.
As a result, CIF China premiums for copper had slipped by $5-$10/mt week on week, sources said.
Platts lowered the assessment for CFR China copper premiums to $90-$105/mt Wednesday, down from $90-$110/mt last week. The price difference between CIF and CFR is negligible.
A Southeast Asian trader indicated lower CIF China premiums at $100-$105/mt, while another Southeast Asian trader heard the level steady at $100-$110/mt.
"The premium was down slightly by around $5/mt," the first Southeast Asian trader said. "Nothing has changed from last week and demand from China has thinned out as the arbitrage window is closed."
The second Southeast Asian trader said there were no buying inquiries or interest from Chinese market participants.
"Market participants are adopting a `wait-and-see` approach as the arbitrage window has closed," a north China-based analyst said. "In addition, China`s recent economic data has not been good, prompting them to be cautious."
Market participants are waiting for Wednesday`s meeting of the US FOMC to see whether interest rates will rise, the analyst said.
A north China-based source said: "There has been an import loss of around Yuan 300/mt ($47/mt) since last week. This week, it`s still a loss. China`s copper consumption was about 50% of annual global output and China`s economic stability is a great concern to the world."
The source heard CIF China premiums at $90-$100/mt, down $5-$10/mt week on week.
China`s value-added industrial output in August expanded 6.1% year on year, the National Bureau of Statistics (NBS) said Sunday. The growth rate was up slightly from 6% in July.
NBS attributed the higher growth rate to improving performance in key industrial sectors and accelerated growth in high-tech industries.
High-tech manufacturing in August grew 10.5% year on year, with the up 0.9 percentage points from July.
Despite the growth, industrial output still faces heavy downward pressure from flagging demand, NBS said.
Copper prices, which have been hurt by the weak Chinese equity market, remained volatile and weak, sources said.
The Chinese spot copper price stood at Yuan 40,640-40,680/mt Wednesday, compared with Yuan 40,760-40,810/mt a week ago, according to the state-owned nonferrous metals information division Beijing Antaike.
Front-month October 2015 copper futures closed at Yuan 40,980/mt on the SHFE Wednesday, compared with Yuan 41,170/mt a week ago.
On Tuesday, the LME official cash price for copper was $5,288-$5,290/mt, compared with $5,277-$5,280/mt a week ago and $5,323-$5,324/mt Monday.
Chinese spot copper concentrate treatment and refining charges (TC/RCs) remained steady at $90-$100/mt and 9-10 cents/lb respectively, unchanged week on 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.
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