CHINA COPPER: Spot CIF trades thin on Lunar New Year, missing arbitrage
Singapore (Platts)--23Jan2013/511 am EST/1011 GMT
Chinese spot import trades for LME-registered brands of copper cathode
on a CIF basis stayed muted on the back of the upcoming Lunar New Year
holidays in February, industry sources said Wednesday.
China will be officially closed February 9-15 for the holiday. Most
workers will be heading home for family reunion celebrations in early
Import offers were heard at $50-65/mt plus the LME cash price, CIF
China, similar to the previous week. The difference in price between CIF and
CFR is negligible.
Platts on Wednesday maintained the weekly assessment of CFR China copper
premiums at $50-65/mt plus the LME cash price, unchanged from the previous
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"The market is really slow-moving as most participants are in a holiday
mood," said a north China-based source.
An east China-based source said: "The demand from Chinese domestic
end-users remains weak as they are cautious, buying only sufficient stocks
for their needs. In fact, I don't see them stockpiling for the holiday."
In addition, sources said the lack of arbitrage opportunity had also
dampened the import interest.
Chinese importers watch over the gap between the LME and Shanghai copper
prices closely as a wider gap indicates an arbitrage opportunity. At the
moment, there is still a loss of around Yuan 2,000/mt ($321/mt) associated
"Although copper prices firmed from last week, they remained weak
affected by the high stocks level in the country," a north China-based
Despite the recent volatility in stocks level, copper continued to be
holding firmly above 200,000 mt in Shanghai Futures Exchange warehouses.
Copper stocks retreated to 208,568 mt in SHFE warehouses last Friday,
down 0.3% week-on-week, after a brief rebound seen previously, according to
the latest weekly statistic from SHFE.
The Chinese domestic copper price was around Yuan 57,990/mt Wednesday,
up from Yuan 57,560/mt last Wednesday.
SHFE February copper futures stood at Yuan 57,650/mt Wednesday, compared
with Yuan 57,540/mt the previous Wednesday.
On Tuesday, the LME official cash price of copper stood at
$8,067-8,068/mt, up from $7,944-7,945.50/mt the previous Tuesday.
SPOT COPPER CONCENTRATE TC/RC STEADY IN JANUARY
Meanwhile, the spot copper concentrate treatment and refining charges,
or TC/RC, remained at $70-80/mt and 7-8 cents/lb in January, unchanged from
December, Chinese sources said.
TC/RCs, the fees charged to miners by smelters to treat and refine their
copper concentrate to produce copper metal, typically rise when concentrate
supply is ample and fall when supply is tight.
With Japan's Pan Pacific Copper and China's Jiangxi Copper having
settled the annual 2013 TC/RC, sources added that the rest of the Asian
smelters should be inking agreements at similar level.
"The spot TC/RC will likely to be holding steady for time being. Anyway,
the Lunar New Year is near, the buying interest will thin out," said the
eastern Chinese source.
Last week, Pan Pacific Copper completed the annual 2013 talks for copper
concentrate treatment and refining charges, or TC/RC, with several western
miners, settling at more than 10% above the 2012 levels at $63.50/mt and 6.35
Based on the 2012 level, the 2013 TC/RCs are at least $69.85/mt and
6.985 cts/lb, respectively.
Jiangxi Copper has also signed the 2013 term agreement for imported
copper concentrate with Freeport McMoRan Copper and Gold at treatment and
refining charges of $70/mt and 7 cents/lb.
China imported 7.83 million mt of copper ores and concentrates in 2012,
up 22.6% year-on-year, according to latest statistics published by the
General Administration of Customs.
The Chinese Customs, however, did not provide a breakdown for the ores
An analyst from Beijing Antaike, the state-run metals consultancy,
estimated China's copper concentrate imports in 2012 at 1.899 million mt, up
10% in 2011.
--Alvin Yee, email@example.com
--Edited by James Leech, firstname.lastname@example.org