960424

Copper demand still up in East Asia

TOKYO: Chinese, Taiwanese and South Korean wire and brass makers are still actively trying to buy copper from Japanese traders and smelters, industry officials said on Wednesday.

They quoted Chinese offers at premiums of $100 per tonne over London Metal Exchange (LME) cash prices, on a CIF basis.

"China's copper buying incentives are still strong, and we have offers from various players, from brass makers to metal brokers," a senior official at a major trade house said.

The traders said the main demand was from major industrial regions such as Shanghai and Guangzhou.

"Some Chinese traders asked us to ship copper to local small ports. Import premiums will be raised in that case," another trade house official said.

Traders said the recent bullish mood in the LME copper market has narrowed the price gap with Chinese prices, cutting into profits for Chinese importers.

On Tuesday, the London Metal Exchange's (LME) three-month copper closed at $2,605 per tonne, up $7 from Monday.

But even at those prices, it is still profitable for Chinese traders to import copper, the traders said, because the three-month July contract opened at 26,150 yuan ($3,139) per tonne on the Shanghai copper futures exchange on Wednesday.

"The LME warehouses in Singapore and the U.S. may be major supply sources, and direct exports from Japanese metal smelters will be another source," a local smelter official said.

But he added Japanese smelters have already sold copper for near-term shipment and had limited capacities to export to China. "One or two smelters in Japan will be ready to sell copper actively at the moment," he said.

Taiwan, which stayed out of the metal market last month because of growing tension with China, has now accelerated its buying of copper, the Tokyo traders said.

China raised tensions in the region last month with a series of war games and missile tests in waters near Taiwan aimed at intimidating the island before presidential elections.

"Taiwanese traders came back to the market," said an official with a major brass maker. The traders quoted Taiwanese import premiums at between $60 and $80 per tonne over the LME cash.

South Korea is also seeking copper, with import premiums at about $60 per tonne, they said.

The following are the latest Japanese premiums to LME cash prices in US$/tonne, on a CIF basis:

April 24 April 17

Copper 40/60 40/50

Zinc 60/70 60/70

Lead 98/100 97/100

Aluminium 55/65 57/60

-Reuter