LONDON (Commodity Online): Movement in physical premiums suggest some near-term slowing of demand for base metals such as copper and nickel, said Barclays Capital in a research note.
The physical premium for copper in Shanghai has fallen to $80-$100 a metric ton from $90-$120 prior to the week-long Chinese New Year holidays, while Shanghai Futures Exchange warehouse stocks have continued to rise.
“Such a trend suggests that softening conditions support the logic of at least a short-term weakening in import levels over the near term to bring the domestic copper market back into balance, at least until an anticipated pick-up in growth and demand conditions from Q2 onwards,” Barclays added.
Physical nickel premiums have fall by as much as half over the past week to $60-$80.
Certainly, as was the case with copper, (a) significant proportion of the refined nickel imported into China in the second half of 2011 went into stock rather than consumption. In fact, Barclays estimates that as much as 50,000 tons of refined nickel imports went into inventories.
