some thoughts, page-4

I wonder where the $1080 per ton premium buyers are located ?


China copper: Spot CIF import offers slip on prevailing weak buying interest

Spot import premiums for London Metal Exchange-registered brands of copper cathode on a CIF China basis slipped, pressured by the persisting weakness in the physical buying interest, market sources said Wednesday. Platts lowered the weekly CFR China copper premiums to $80-90/mt Wednesday from $80-105/mt last week amid lower bids and offers.

A Southeast Asian trader lowered his export premiums to $80-90/mt, from $90-100/mt last week, while another Southeast Asian trader kept his premiums steady at $80-100/mt CIF The price difference between CFR and CIF is negligible."Our [CIF China] offers have come down to $80-90/mt [plus LME cash]. The market is very quiet as Chinese importers are not buying [due to] financing and cash flow issues at the end of the year. There's also no arbitrage opportunity at the moment," said the first Southeast Asian trader.Chinese copper importers are mostly traders who keep a close watch on LME and domestic copper prices for arbitrage opportunities.

The second Southeast Asian trader added: "There's no buyer even if I lower my premiums. Nobody is buying. Demand is very bad and the market sentiment is very weak." An east China-based source said he had heard import premiums wide-ranging at $70-100/mt compared with $90-105/mt last week."Premiums have dropped this week. I heard indications at $80-100/mt but also lower ones at $70-85/mt. Generally, $80-90/mt is the most commonly heard range." he said.A north China-based analyst, who heard import premiums at $70-80/mt, said that the Chinese domestic downstream demand was still absent.

"The year-end buying did not appear to have started. Traditionally, factories should be stocking up to fulfill production orders during this period," the northern Chinese analyst added. An east China-based trader said the Qingdao incident had prompted banks to tighten to credit policy on loans and this had also helped to weed out some unprofessional traders, thereby trimming the import interest and volume. In June, Qingdao port halted shipments of aluminum and copper during a probe into loan irregularities involving warehouse stocks.

"Most of the imports are for refinancing deals rather than for actual use. Domestic end-users can source locally or obtain stocks from the bonded warehouses in Shanghai," the eastern Chinese trader added.There is no official data on copper stocks in Chinese bonded warehouses but this eastern Chinese trader estimated the stocks volume to be around 500,000 mt at the moment, down from 600,000-700,000 mt in September-October.

Chinese sources added the current import-related loss between Yuan 1,000-2,000/mt ($164-327/mt) had continued to keep Chinese importers away from the market.Chinese domestic spot copper price was Yuan 47,910-47,970/mt Wednesday, down from Yuan 48,180-48,250/mt last Wednesday.

The front-month November copper futures closed Wednesday at Yuan 47,520/mt on the Shanghai Futures Exchange, down from Yuan 48,470/mt last week, while the weekly copper stocks level inched up 0.8% week on week to 95,824 mt in SHFE warehouses last Friday. On Tuesday, the LME official cash price for copper stood at $6,705-6,705.50/mt Tuesday compared with $6,859-6,859.50/mt a week earlier.

Meanwhile, Chinese spot copper concentrate treatment and refining charges (TC/RCs) remained steady at $110-120/mt and 11-12 cents/lb respectively this week, unchanged from the previous 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.

Sources expect China's copper concentrate imports to continue to rise due to rising copper capacities which was expected to reach around 10 million mt in 2014, up 11.1% year on year. For the first nine months of the year, China imported 8.56 million mt of copper concentrate, up 19.5% year on year, according to latest data released by the General Administration of Customs.China's imports from Chile stood at 2 million mt, up 6.8% year on year. The South American country is China's top source of imported copper concentrate.

The other top sources over January-September were: Peru, 1.5 million mt; Mongolia, 952,301 mt; Australia, 696,666 mt; Mexico, 672,094 mt; the US, 455,331 mt; Canada, 359,007 mt; Kazakhstan, 319,258 mt; Laos, 173,996 mt; and Turkey, 147,052 mt. Imports from the 10 countries totaled 7.28 million mt, representing 84.9% of China's total copper concentrate imported for the first nine months of the year.

http://en.chinamining.com.cn/News/2014-11-06/1415236085d70232.html