The spot import premium for London Metal Exchange-registered brands of copper cathode on a CIF China basis slipped as buying interest dwindled, industry sources said Wednesday.
With the arbitrage opportunity closed, sources added that that the import related loss had widened, prompting importers to stay away from the market.
S&P Global Platts assessed the CFR China copper premium at $75-$80/mt Wednesday, down from $80-$90/mt last week amid lower indications heard.
A north China-based trader heard market offers at $75-$80/mt plus LME cash, CIF China, down from $80-$90/mt last week, while an Asian trader reckoned the CIF premium to be at $75-$80/mt, down from $80-90/mt last week.
"There's no arbitrage opportunity now. Anyway, I haven't done any spot trade lately," the northern Chinese trader added.
Chinese sources noted that the import-related loss was about Yuan 800/mt ($117/mt) this week, compared with around Yuan 500/mt last week.
A north China-based industry source said: "China's domestic copper prices are rising faster than LME's, which have been very volatile. This widened the import-related loss. The CIF China copper premium has slipped to $75-$80/mt from $80/mt last week."
An east China-based analyst and an east China-based industry source added that a weaker yuan had also made imports more expensive thereby dampening the import interest.
The dollar was trading at Yuan 6.8592 Wednesday, compared with Yuan 6.8495 Tuesday and Yuan 6.7832 last Wednesday. The SHFE front-month November futures contract closed at Yuan 44,480/mt, up from Yuan 41,640/mt last Wednesday and up from Yuan 43,280/mt Tuesday.
On Tuesday, the official LME cash price of copper was $5,445-$5,448/mt, compared with $5,043-$5,044/mt last Tuesday and $5,619.50-$5,620/mt Monday.
Chinese spot copper concentrate treatment and refining charges (TC/RCs) for clean ore generally remained steady at in excess of $100/mt and 10 cents/lb, respectively, industry sources said.
The spot TC/RCs were mostly heard at $100-$102/mt and 10-10.2 cents/lb, respectively, down from the $100-$105/mt and 10-10.5 cents/lb heard in October amid tighter supply of copper concentrate.
TC/RCs are fees charged to miners by smelters to treat and refine copper concentrate to produce copper metal. They typically rise when concentrate supply is ample and fall when supply is tight.
Sources added that market participants were waiting for the TC/RCs talks for 2017 to begin in December and taking direction from it for the spot level.
The talks are between the China Smelters Purchase Team, or CSPT, and international miners.
CSPT was set up in November 2003 to jointly negotiate TC/RCs with international copper miners.
CSPT had earlier shrugged off lower spot treatment and refining charges at $90-100/mt offered to non-member copper smelters recently and insisted on fees of $105/mt and 10.5 cents/lb, with a deal done at that level by one of its member smelters, Chinese brokerage Mailyard Futures said in a recent report.
US copper miner Freeport McMoRan agreed a contract for 2016 TC/RCs with China's Jiangxi Copper and Tongling Nonferrous at $97.35/mt and 9.735 cents/lb, reported in January.
China's imports of copper concentrate stood at 1.36 million mt in October, up 29.5% year on year, according to latest data by the General Administration of Customs.
The October figure, however, was 2.2% lower than the imports recorded in September.
Over January-October, copper concentrate imports totaled 13.59 million mt, up 31.6% year on year.
Chinese sources have anticipated a dip in the copper concentrate imports on a month on month comparison mainly due to the recent strike at the Las Bambas copper mine in Peru.
