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Read on to find out more about updates on stocks of base metals in Shanghai bonded warehouses from the Fastmarkets price reporting team.
Shanghai bonded aluminium inventories went up significantly in March, despite a closed import arbitrage window, surging by more than 150% month on month. Cargo holders were in no rush to sell amid a lack of import opportunities, but they expected better arbitrage terms in the months ahead, Fastmarkets heard on Tuesday April 9.
Fastmarkets assessed Shanghai bonded aluminium stocks volumes at 20,900-21,900 tonnes in March, up month on month by 154.8% from 7,900-8,900 tonnes, but down by 60% year on year from 53,000-54,000 tonnes.
“Market participants just conventionally replenished stocks because of the very low stock level in the previous month,” a trader said.
“Cargo holders are in no rush to sell the metals, particularly with the import arbitrage window closed now,” the same source added. “They would rather hold on to the materials for a while, expecting an improved import arbitrage in the coming months.”
The aluminium import arbitrage showed a loss of $102.92 per tonne on March 28, compared with a loss of $47.59 per tonne on March 1.
The increased stocks in China’s bonded warehouses also reflected recent bullish sentiment in the Asian market, industry sources said.
“Almost all the market participants I know expect that spot premiums in the Japanese and South Korean markets will rise in the second quarter,” a second trader said. “The Chinese market is close to these two markets. So even if the import arbitrage window for China stays closed, cargo holders can choose to sell the metal to Japan or South Korea in the near future at good premiums.”
“No one want to sell now,” a third trader said. “But [they will] try to keep some stock on hand.”
Fastmarkets’ monthly assessment of the aluminium P1020A premium, bonded, in-whs Shanghai, was $135-145 per tonne on March 26, unchanged from the previous month.
Nickel stocks in Shanghai bonded warehouses continued to decrease in March, with domestic brands continuing to export their bonded units.
Fastmarkets assessed the March nickel bonded stocks at 3,450-4,450 tonnes on March 29, compared with 2,700-4,700 tonnes in February.
Market participants attributed the drop to continued export efforts by domestic brands.
“We’ve received offers from new refiners at $50 per tonne on an ex-works basis,” a nickel trader based in Shanghai said.
The same trader said that most of the exported units were delivered into the London Metal Exchange’s warehouse system, with new Chinese brands currently having a hard time finding downstream demand.
Fastmarkets assessed both the nickel min 99.8% full plate premium, in-whs Shanghai, and the nickel min 99.8% full plate premium, cif Shanghai, at $0-200 per tonne on April 2, both unchanged since December 19.
The increase in Shanghai copper bonded inventories continued in March, with a sustained arbitrage loss discouraging imports, Fastmarkets heard.
“Spot buying activities in the bonded copper cathodes market were very limited due to the prolonged arbitrage loss,” one copper market participant in Shanghai said. “Also, some copper smelters sent some units to bond, explaining the continuing growth of Shanghai bonded copper inventories.”
But other market participants said that smelters have begun to reduce deliveries of copper units into the Shanghai bonded area following the start of the unit maintenance season at domestic copper smelters, which were facing tighter supplies of copper concentrate raw materials.
Fastmarkets calculated the Shanghai bonded copper inventories at 55,000-58,000 tonnes in March, up from 32,000-34,000 tonnes in February. The most recent calculation on April 8 gave a total of 62,000-65,000 tonnes.
The prolonged arbitrage loss, which has hindered import appetite, weighed on the premiums for bonded copper cathodes, Fastmarkets understood.
Fastmarkets calculated the copper import arbitrage at a monthly average loss of $181.82 per tonne in March 2024, against a loss of $154.85 per tonne a month earlier.
The daily assessment of the copper grade A cathode premium, in-whs Shanghai, was $35-55 per tonne on March 28, the last trading day of the month, compared with $45-65 per tonne on February 29.
The market was most recently assessed at $35-50 per tonne on April 8.
Similarly, Fastmarkets assessed the benchmark daily copper grade A cathode premium, cif Shanghai, at $40-58 per tonne on March 28, against $43-60 per tonne on February 29.
Its most recent assessment on April 8 was unchanged at $40-58 per tonne.
Zinc inventories in Shanghai bonded warehouses were unchanged in March, with spot liquidity of bonded units remaining thin, Fastmarkets heard.
Four bonded warehouses reported very low stocks of zinc, with a closed arbitrage window restricting buyers’ interest in overseas units.
Fastmarkets assessed the Shanghai bonded zinc stocks at 1,000-2,000 tonnes at the end of March, down by 57.1% on an annual comparison.
The zinc import arbitrage calculation averaged a loss of $93.62 per tonne in March, widening from an average loss of $70.24 per tonne in February.
Fastmarkets assessed the zinc SHG min 99.995% ingot premium, cif Shanghai, at $90-120 per tonne on March 26, down from $100-120 per tonne on February 27.
The corresponding zinc min 99.995% ingot premium, in-whs Shanghai, was assessed at $100-120 per tonne on the same day, unchanged since the end of January.
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