Copper Traders are Tacking Their Ships Away From China’s Warehouse Storm

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Worries over commodity-backed financing deals in China are sending some China-bound cargo ships laden with copper to other destinations where higher prices are on offer, traders and analysts told the Wall Street Journal.

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The price China pays for the metal has fallen relative to the US and Europe as demand in the world’s biggest buyer of copper has fallen. A probe into metals-backed financing in China’s eastern port of Qingdao is rattling the mainland copper market, including in much larger ports such as Shanghai.

Traders say it is hard to estimate how much copper is being diverted from China, but sales are still being made. They say the extra price China pays has shrunk to $60-$70 a ton above the London Metal Exchange’s benchmark price, still down by half from a month ago. By comparison, the premium in the US has jumped to as high as $160 per ton, as demand there is robust.

On Thursday, June 26, the day’s biggest mover was the price of Chinese copper bar, which saw a 0.8 percent increase to CNY 51,530 ($8,266) per metric ton. This increase comes after the price fell for the two previous days. After falling for two days, the Chinese copper cash price rose 0.8 percent to CNY 51,730 ($8,298) per metric ton. After a couple of days of decreasing prices, the price of Chinese copper wire held steady at CNY 50,270 ($8,064). The price of Chinese bright copper scrap held steady at CNY 44,300 ($7,106) per metric ton.

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The price of US copper producer grade 122 increased 0.5 percent to $3.86 per pound. The price of US copper producer grade 110 rose 0.5 percent to $3.86 per pound. The price of US copper producer grade 102 inched up 0.5 percent to $4.05 per pound. The Japanese copper cash price rose 0.1 percent to JPY 734,000 ($7,209) per metric ton.

The cash price of primary copper weakened by 0.1 percent on the LME, settling at $6,890 per metric ton. Also on the LME, the 3-month price of copper saw little change in its price on Thursday at $6,871 per metric ton.

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