Shanghai copper set to surge on dwindling stocks, traders say
SHANGHAI: Copper inventories on the Shanghai Futures Exchange (ShFE) are expected to decline again this week, continuing the sharp drop and potentially triggering a price surge, according to four traders.
The surge in the prices of ShFE copper, a key metal for China's vast manufacturing sector, will attract more metal to the exchange warehouses, making a complete stock depletion unlikely, traders said.
Already, the tightness is showing in the Yangshan copper premium, a gauge of China's appetite for importing copper.
It stood at $93 a ton on Monday, the highest since December 2023 and up more than 40% since January 2.
Copper inventories on the ShFE dropped 32% to 116,753 tons last week, the steepest percentage decline on record, as local buyers took delivery of metal purchased during a price slump earlier this month.
One of the traders said ShFE copper stocks could fall another 10,000 tons when warehouse stocks are released on Wednesday, two days earlier than usual because of public holidays in China from May 1 to May 5.
Traders diverted copper to the US amid a threat of tariffs on US imports, leading to a slide in ShFE stocks and driving up prices on COMEX.
This fuelled a surge in COMEX stocks to 137,759 tons metric tons on Tuesday, up 45% since January 2 and at their highest since December 2018.
Copper rallies to one-month peak on signs of improving demand
The tariff threat on US imports boosted prices on the COMEX, while the anticipation of higher prices attracted shipments to the US, elevating COMEX inventory.
Consumers in China are struggling to secure supplies in an already tight Chinese market partly due to the US-China trade tensions, which have reduced a major source of scrap metal from the United States.
Typically, copper prices on the ShFE are higher than on COMEX due to differences in supply and demand in China and the US and other factors like freight and taxes.
But for much of the time since mid-March, COMEX copper prices have been higher due to the buying frenzy in anticipation of import tariffs.
Traders expect the price relationship to revert to normal as the need to replenish Chinese inventories takes precedence. One trader said the prospect of higher prices on ShFE could also draw metal stored in Shanghai's bonded warehouses
. Stocks sat at 75,500 tons on April 24, down 5% week-on-week but nearly five times January 16's low of 15,200 tons.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
4 hours ago
- Business Recorder
Iranian oil imports to China hit record high in June
SINGAPORE: China's Iranian oil imports surged in June as shipments accelerated before the recent conflict in the region and demand from independent refineries improved, analysts said. The world's top oil importer and biggest buyer of Iranian crude brought in more than 1.8 million barrels per day (bpd) from June 1-20, according to ship-tracker Vortexa, a record high based on the firm's data. Kpler's data put the month-to-date average of China's Iranian oil and condensate imports at 1.46 million bpd as of June 27, up from one million bpd in May. The rising imports are fuelled in part by the accelerated discharge of high volumes of Iranian oil on the water after export loadings from Iran reached a multi-year high of 1.83 million bpd in May, Kpler data showed. It typically takes at least one month for Iranian oil to reach Chinese ports. Robust loadings in May and early June mean China's Iran imports are poised to remain elevated, Kpler and Vortexa analysts said. Independent Chinese 'teapot' refineries, the main buyers of Iranian oil, also showed strong demand for the discount barrels as their stockpiles depleted, said Xu Muyu, Kpler's senior analyst. A possible relaxing of US President Donald Trump's policy on Iranian oil sanctions could further bolster Chinese buying, she added.
Express Tribune
5 hours ago
- Express Tribune
SBP injects Rs12.38 trillion
Listen to article The State Bank of Pakistan (SBP) injected Rs12.38 trillion into the financial system through two separate Open Market Operations (OMOs) on June 27, 2025, to manage the liquidity vacuum caused by Eid-related cash demand and fiscal needs of the government constrained by International Monetary Fund (IMF) conditions. The larger of the two was a conventional reverse repo OMO, in which SBP accepted Rs12.20 trillion out of Rs12.42 trillion offered by banks at a rate of 11.07% for a seven-day tenor. A total of 34 bids were accepted out of 36 received, with rates ranging between 11.20% and 11.04%. Additionally, a Shariah-compliant Mudarabah-based OMO saw the SBP accept Rs178 billion out of Rs326 billion offered at a slightly higher rate of 11.13% for the same tenor. Only two bids were received and accepted, showing limited participation from Islamic financial institutions. Analysts attributed the rise in OMO stock to higher currency in circulation during Eid (a temporary effect) and a lag between debt repayments and incoming inflows. They expect OMO levels to ease as inflows materialise in the coming weeks. In the currency market, the Pakistani rupee slightly weakened against the US dollar on Friday, falling by 0.02% in the interbank market. By day's end, the rupee closed at 283.72, down five paisas from Thursday's close of 283.67. Meanwhile, gold prices in Pakistan also saw a steep decline, mirroring a global drop of nearly 2% after confirmation of a US-China trade agreement boosted investor risk appetite and reduced demand for safe-haven assets. According to the All-Pakistan Gems and Jewellers Sarafa Association, the per tola gold price dropped by Rs5,000 to Rs351,000, while the 10-gram price fell Rs4,287 to Rs300,925. This came after gold gained Rs1,335 per tola the previous day, reaching Rs356,000. Adnan Agar, Director at Interactive Commodities, said gold hit a new intra-day low on Friday. "Gold touched a low of $3,255 and is now trading around $3,276 after opening at $3,320," he said, adding that, "The trend remains bearish, with potential downside targets near $3,213 before any short-term rebound." He added that confirmation of a US-China trade deal has dampened gold's momentum, and if similar agreements emerge with other major economies like the European Union, gold could revisit levels between $3,000 and $2,800 in the medium term. "Sentiment is currently tilted towards the downside, and the market may continue to face pressure into next week," Agar said.
Business Recorder
5 hours ago
- Business Recorder
Shares rally on China-US trade optimism
NEW YORK/PARIS: Global shares reached a record high on Friday, helped by market optimism over signs of progress in US-China trade talks, while the dollar held close to its lowest levels in more than three years. The benchmark S&P 500 index and Nasdaq hit all-time highs, lifted partly by gains in megacap growth stocks including Nvidia and Amazon. The S&P 500 index and Nasdaq are headed for a weekly gain and are up about 5% this year, following a volatile first half of the year, dominated by US President Donald Trump's tariff announcement on April 2, which sent stocks plunging. The Dow Jones Industrial Average rose 1.13% to 43,879.23, the S&P 500 rose 0.62% to 6,178.95 and the Nasdaq Composite rose 0.51% to 20,270.99. The pan-European STOXX 600 index finished up 1.1% on the day, set for a weekly gain.
