This week (August 10-August 13), Yangshan copper premium warrant transaction weekly average price range was $91-104/mt (QP August, average $98/mt); B/L transaction weekly average price range was $87-99/mt (QP September, average $93/mt); EQ copper CIF B/L prices were $57-69/mt (QP September, average $63/mt). As of August 13, the exchange-rate-adjusted SHFE/LME copper price ratio for LME copper versus the SHFE copper 2608 contract stood at 1.128, with an import loss of around 1,004.08 yuan/mt, which narrowed by about 381 yuan/mt WoW. As of Thursday, the LME copper August-date backwardation structure widened from the same period last week, with the carry spread between August and September dates at -$117.45/mt. Currently, mainstream offers for ER registered copper B/L are around $85-95/mt; mainstream offers for registered copper warrants are around $100-105/mt; mainstream offers for EQ copper B/L are around $65-70/mt. This week, Yangshan copper premiums trended weaker, as the SHFE/LME price ratio remained unfavorable, LME nearby contracts showed a steep backwardation structure, and rising copper prices dampened consumption, leaving downstream buying sentiment weak. However, supplier offers had not yet shown a clear retreat, and the divergence between buyers and sellers in the market gradually widened. In addition, according to SMM, the opening of the copper cathode export window in this round was mainly driven by the substantial backwardation structure in nearby LME contracts. Changes in SHFE and LME prices and term structures created export arbitrage conditions for some copper cathode, with export volume currently planned at about 20,000 mt. However, as the August contract approached delivery, copper cathode exports mainly flowed into China bonded zones. According to SMM, as of Thursday this week (August 13), copper inventories in China bonded zones rose by about 4,100 mt WoW from the previous period (August 6) to 35,200 mt. Specifically, Shanghai bonded inventories rose by 4,200 mt WoW to 31,100 mt, while Guangdong bonded inventories fell by 100 mt WoW to 4,100 mt. The main reasons for the increase in bonded zone inventories were: 1. The recent opening of the export window created export arbitrage conditions for some copper cathode, causing cargoes to concentrate in bonded zones; 2. Previously, cancelled warrants from LME Asian warehouses arrived at ports in succession, further lifting inventory levels. Looking ahead, the market will wrestle with whether the SHFE/LME price ratio can recover and with the supply-demand pattern. On the supply side, supply will be shaped by short-term import arrivals and higher exports, while medium- and long-term supply will remain constrained by the US siphoning effect. On the demand side, weak consumption has left downstream buyers with low psychological expectations for transaction prices. Traders are expected to maintain a strong wait-and-see sentiment, with the tug-of-war between buyers and sellers set to grind on. In addition, going forward, as the SHFE and LME term structures are further adjusted, the copper cathode export window and cargo flow directions will still need to be continuously monitored.

This week (Aug. 3 – Aug. 7), the weekly average warrant transaction price range for Yangshan copper premiums was $101–$112/mt, QP August, with an average of $106/mt; the weekly average B/L transaction price range was $96–$107/mt, QP September, with an average of $102/mt; and EQ copper CIF B/L prices were $64–$73/mt, QP September, with an average of $69/mt. As of Aug. 7, the ex-exchange rate SHFE/LME copper price ratio for the SHFE copper 2608 contract against LME copper was 1.1247, with an import loss of around 1,385.43 yuan/mt, expanding by about 857 yuan/mt WoW. As of Friday, the backwardation structure for the August LME copper date widened WoW, with the carry spread between the August and September dates at −$61.53/mt. Currently, mainstream offer prices for ER registered copper B/L have dropped to double-digit levels; mainstream warrant offer prices for registered copper were near $100/mt. This week, Yangshan copper premiums pulled back from high levels, mainly because the SHFE/LME price ratio continued to deteriorate, compounded by the widening backwardation structure of nearby LME contracts, which increased suppliers' willingness to offer cargo. Meanwhile, as copper prices surged, downstream consumption demand was poor. Additionally, high premiums in the domestic market previously attracted cancelled warrants from LME Asian warehouses, which gradually arrived in China, causing temporary congestion at Shanghai Port. Together with some export cargo pressuring prices, market spot premiums weakened. According to SMM data, China's bonded zone copper inventories as of Thursday this week (Aug. 6) decreased by about 6,000 mt WoW from the previous period (Jul. 30) to 31,100 mt. Specifically, Shanghai bonded inventory decreased by 6,500 mt WoW to 26,900 mt, while Guangdong bonded inventory increased by 500 mt WoW to 4,200 mt. The weekly bonded zone inventory decline was mainly because of reports that cargo ships were heading to the US. Additionally, the slight opening of the export window led to small-scale exports by some smelters to the bonded zone. Looking ahead, the siphoning effect from North America continues, so the logic of overall supply constraints in the market remains. However, with the SHFE/LME price ratio significantly inverted, consumption demand suppressed by high copper prices, and expectations of concentrated cargo arrivals at ports, traders' psychological price expectations for spot cargo are rapidly declining, and imported copper premiums are expected to see a temporary pullback. Additionally, with the export window slightly open, smelters have export expectations. According to SMM, export volumes in the first week of August up to now have been relatively limited, and future export volumes need continued monitoring.

On August 7, the average warrant price fell $3/mt from the previous trading day to $101/mt (price range: $95-107/mt); the average B/L price fell $3/mt to $97/mt (price range: $90-104/mt); and the average price for EQ copper (CIF B/L) fell $2/mt to $65/mt (price range: $60-70/mt), with quotations referencing cargoes arriving from August to early September. As the SHFE/LME price ratio continued to deteriorate, the early market was mostly cautious, with quiet bids and offers. As copper prices shot up and consumption demand was weak, combined with some export cargoes weighing on prices, the spot premium pulled back in stages, and traders’ psychological price expectations trended lower. It was heard that mainstream quotations for August registered warrants were around $100/mt in the market today.

The average warrant price on August 4 fell $1/mt from the previous trading day to $110/mt (price range: $106-114/mt); the average B/L price dropped $1/mt to $105/mt (price range: $100-110/mt); and the average price for EQ copper (CIF B/L) declined $1/mt to $71/mt (price range: $67-75/mt), with quotations referencing cargoes arriving in August. The SHFE/LME price ratio for nearby contracts remained in inverted territory while the backwardation structure continued to widen. Market offers increased, with some suppliers slightly lowering their quotations under pressure. However, the overall supply-demand weakness persisted, and buyers and sellers remained locked in a standoff. EQ copper arriving in early August was reportedly quoted at $68-70/mt, registered B/L for August arrival traded at $113/mt with mainstream quotations at $110-120/mt, and registered warrants traded around $110/mt.

On July 31, the average warrant price remained unchanged from the previous trading day, standing at $112/mt (price range: $108-116/mt); the average B/L price remained unchanged from the previous trading day, standing at $107/mt (price range: $104-110/mt); the average price of EQ copper (CIF B/L) fell by $1/mt from the previous trading day to $74/mt (price range: $70-78/mt), with quotes referencing August-arrival cargoes. The SHFE/LME price ratio weakened slightly today, with the backwardation structure for nearby contracts widening. As expectations of tightness in available supply weakened and downstream buying interest remained sluggish, the premium lacked further upward momentum. It was heard that EQ copper arriving in late August was traded at $75/mt; mainstream quotations for registered B/Ls arriving in August were around $115-120/mt; and mainstream quotations for EQ copper arriving from August to early September were at $75-85/mt.

This week (July 27 – July 30), the weekly average price range for Yangshan copper premiums B/L transactions was $104–$110/mt, QP August, with an average price of $107/mt; the weekly average price range for warrant transactions was $108–$117/mt, QP August, with an average price of $112/mt; EQ copper CIF B/L was $70–$80/mt, QP August, with an average price of $75/mt. As of July 30, the SHFE/LME copper price ratio for the SHFE copper 2608 contract after excluding exchange rates was 1.1345, with an import loss of approximately 528 yuan/mt, which was a narrowing of roughly 107 yuan/mt from the previous week. As of Thursday, the LME copper backwardation structure for the August date widened WoW, with the spread between the August date and the September date at -$12.94/mt. Currently, mainstream offers for ER copper B/L are around $115–$120/mt; mainstream offers for registered copper warrants are around $120–$125/mt; mainstream offers for CIF B/L EQ copper are around $75–$85/mt. This week, Yangshan copper premiums maintained a relatively stable trend. As expectations of tight available spot supply began to weaken, premiums lacked further upward momentum. However, influenced by the persistently unfavorable SHFE/LME price ratio, mediocre downstream consumption demand, and a widened backwardation structure in near-term LME contracts, seller offers increased, yet downstream buyers remained cautious at high prices and stayed on the sidelines. Both parties held divergent positions, leading to a further stalemate throughout the week, resulting in sluggish actual transactions. According to SMM, as of Thursday this week (July 30), China's bonded zone copper inventories decreased by approximately 100 mt MoM from the previous period (July 23) to 37,100 mt. Among these, Shanghai bonded inventories increased by 100 mt MoM to 33,400 mt, and Guangdong bonded inventories decreased by 200 mt MoM to 3,700 mt. Bonded zone inventory showed minimal destocking changes, with both warehouse inflows and warehouse withdrawals remaining low during the week. Looking ahead, overall market supply will remain constrained due to the sustained siphoning effect from North America. However, the market situation is expected to tighten further entering August. Cargoes previously canceled from LME Asian warehouses and shipped to China will arrive at ports in batches gradually during August. If consumption fails to show a significant improvement, the import SHFE/LME price ratio will struggle to rebound, and short-term supply growth could impact spot premiums.