GLOBAL COPPER WRAP: Asia premiums rise on potential Chinese VAT cut; poor demand slows Europe, US markets

April 16, 2020 / www.metalbulletin.com / Article Link

Copper cathode premiums in Asia continued to rise in the week to Tuesday April 14, with the prospect of a VAT cut in China leading to an increase in imports, while broadly weak demand and positive forward spreads kept premiums steady in Europe and the US.

Chinese market eyes VAT reduction margin in premium riseStagnant demand hinders European spot businessUnited States looks ahead with market steadyAsia premiums continue to make gains
Copper premiums have continued to rise in the port of Shanghai, where buyers continue to speculate about the likelihood of a cut in value added tax from 13% to 9% later this month.
Fastmarkets' copper grade A cathode premium, in-whs Shanghai premium, was $68-86 per tonne on Tuesday April 14, its highest level since October.
Chinese trading companies have scrambled to import cathodes basis LME to sell in the domestic market and capture a potential 3% reduction in VAT as margin, roughly $153 at today's $5,100 per tonne copper price.

"High premiums...

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