Copper stocks at Shanghai bonded warehouses fell in April amid an increase in import activity due to expectations of a cut to China's VAT rate in May and the opening of the arbitrage window between Shanghai and London.
Fastmarkets assessed
Shanghai bonded copper stocks at 291,000-301,000 tonnes on Thursday April 30, down by 12.7% from 334,000-344,000 tonnes on March 23.
"The rumor of a VAT cut enticed [buyers to the market]," a Shanghai-based trader told Fastmarkets. "Bonded cathodes are the preferred choice given the shortage of seaborne material amid the lockdowns overseas and there's been
a rush to import cathodes ahead of the cut being introduced."
A second Shanghai trader said: "Most traders expect the potential cut to happen on May 1, so they actively imported in April, increasing demand for bonded material in particular."
At the same time the opening of the import arbitrage window between Shanghai and London also inspired import activity, which caused Shanghai bonded copper stocks to decline further.
"The arbitrage is getting better [and is] incentivizing import activity," a third trader in Shanghai said.
Fastmarkets'...