Shanghai Futures Exchange copper closed at 102,660 CNY/mt on Saturday, gaining 1.56% in a session where LME and COMEX both declined. The divergence pushed the import arbitrage window wider, with Chinese buyers facing an effective premium of roughly $280/mt over LME cash.
Chinese copper semis producers are restocking ahead of the late-June production window. Industry sources report utilization rates at 78% across the rod and wire sectors, up from 74% in May. Mill margins have improved on the back of falling scrap copper availability, which has tightened since the May import restrictions took effect.
State Grid procurement has been a steady demand driver. The utility awarded 187,000 tonnes of cable contracts in the June tenders, up 12% year-on-year. This pipeline of orders is keeping Chinese mills operating at elevated rates even as export demand softens.
The wider SHFE premium makes imported copper more expensive for Chinese buyers, but domestic production is running near capacity. China's refined copper output in May was 1.12 million tonnes, the second-highest monthly figure on record, according to the National Bureau of Statistics.
Chinese buyers with SHFE-linked contracts should note the widening premium relative to LME. For import contracts, consider shifting pricing references to LME with a negotiated settlement discount. The premium may persist as long as State Grid tenders remain heavy.