Copper’s surge is spurring Chinese smelters to step up shipments abroad, lured by near-record prices in London while higher costs deter buyers at home.
Two major Chinese smelters are arranging as much as 25,000 tons of spot shipments to bonded warehouses and Asian depots monitored by the London Metal Exchange for delivery in the coming weeks, people with knowledge of the plans said, asking not to be named discussing non-public information.
A broad rally in metal prices is creating opportunities for the top-producing country to profit from additional exports. Copper prices are on a tear following a series of mine disruptions around the world, while US monetary easing brightens the outlook for global demand. A broad rally in metal prices is creating opportunities for the top-producing country to profit from additional exports. Copper prices are on a tear following a series of mine disruptions around the world, while US monetary easing brightens the outlook for global demand.
Spot copper flows from China in addition to term sales may rise to 50,000 tons, according to the median estimate of four traders.
Smelters are taking advantage of copper’s widening premium against Chinese benchmarks in a repeat of a spike in outbound shipments this summer. Domestic producers are also exporting zinc, Bloomberg reported earlier.
In London, the spread that spot copper prices command over futures has surged, signaling a shortage of immediate supplies.
Meanwhile, the rapid surge in prices is easing demand in China, where manufacturers are grappling with slowing consumption and weak margins.
Demand from electric wire producers, a key source of consumption of the metal, has slowed since the end September, according to traders. The Yangshan copper premium, paid by traders for imported cargoes into China, slumped over 20% since late September, in a sign of shrinking demand.
