Even as London copper prices remain mired near their lowest since 2009, the premium paid for the metal in the Chinese port of Yangshan is at a three-month high.
Buyers who haven’t locked in long-term supply are driving gains on fears that further depreciation in the Chinese currency will only make the metal more expensive in yuan terms, according to analysts at SMM Information & Technology Co. and Maike Futures Co. in Shanghai.
The extra cost over London Metal Exchange cash prices was $102.5 a metric ton as of Jan. 25, compared to the benchmark contract for 2016 of $98 a ton offered by the world’s biggest copper miner, Chile’s Codelco. Since Aug. 10, the day before China shook markets with a shock devaluation of the yuan, the Yangshan premium has gained almost 14 percent while the yuan has weakened around 6 percent.
— With assistance by Alfred Cang