Tongling Nonferrous Won the First Battle the First Batch of International Copper Delivery Was Completed

Tongling Nonferrous Won the First Battle the First Batch of International Copper Delivery Was Completed

A few days ago, Tongling Nonferrous Metals Group Co., Ltd. completed the delivery of the first batch of 3000 tons of International copper. Being the biggest single-month delivery volume in domestic smelting plants, this transaction is highly acclaimed by Shanghai Futures Exchange and Shanghai International Energy Trading Center.

The successful delivery of International copper is not only the powerful measure of Commerce Department of Tongling Non-ferrous Metals Group Holding Co. LTD to seize market opportunities and expand sales channel but also a big challenge for Tongling Nonferrous in special and difficult anti-pandemic period in terms of overall coordination.

International copper futures contract is the newly listed copper futures contract in Shanghai International Energy Trading Center under the circumstance of the Center continuing to use the transaction mode of “International Platform, Net Price Transaction, Bonded Delivery, RMB Valuation”. Therefore, figuratively, it is called International copper. International copper adjoins the biggest copper consumption area and bonded area all across the globe. It aims to rely on high circulation and high financial attribute of bonded warehouse receipts, and volume advantage of bonded electric copper, to capture bigger International pricing power in electrolytic copper, thus promoting RMB internationalization. In the meantime, International copper is an effective supplement to current Shanghai copper futures, and it provides new hedging instruments and interest arbitrage option for all kinds of market players.

International copper futures contract was listed for transaction at the end of 2020. Since then, Commerce Department of Tongling Non-ferrous has always been paying close attention to the transaction performance, and has taken part in interest arbitrage of the contract. Through the procedures, the Company has learned precious experience. In this February, they paid field visits to primary International copper delivery warehouse to fully comprehend corresponding transaction procedures, thus getting themselves ready for International copper routine operation.

Since March, as the price of electrolytic copper keeps going up swiftly, Commerce Department of Tongling Non-ferrous immediately responded to market fluctuations. Through analyzing price trend and comprehensively considering and discussing domestic and overseas supply and demand, Commerce Department of Tongling Non-ferrous predicts that the negative difference between domestic and overseas price will further grow bigger, and it decides to consolidate efforts in exporting. In order not to let logistics run ruin market opportunities, Commerce Department of Tongling Non-ferrous decisively selects International copper delivery as the effective supplement to routine export. In the context of inactive International copper transaction volume, Commerce Department of Tongling Non-ferrous has been arbitraging step by step, and has realized average tax-excluded price difference of RMB 1100/ton. This succeeded in pioneering new channel for the Company’s electrolytic copper sales. In addition, this also succeeded in seizing domestic-overseas price difference benefit while avoiding exchange rate risk.

However, subsequent logistics delivery was thoroughly hindered by the outbreak of pandemic in East China that made Tongling and Shanghai under lockdown. International copper contract had achieved no transaction for half a month before delivery date in current month, while physical delivery had to be completed as scheduled in International copper contract short position. In the extremely urgent situation, Commerce Department of Tongling Non-ferrous formulated emergency plans to make quick investigation and analysis, and effectively made concerted efforts with brotherly units. They competed against time and succeeded in ensuring the delivery of International copper.

Commerce Department of Tongling Non-ferrous closely worked with Jinguan Copper, Quality Inspection Center, and Anhui Port Logistics, to ensure Jinguan Copper could complete the selecting, packaging and delivery of International copper during closed manufacturing. Commerce Department of Tongling Non-ferrous also tried to realize delivery through domestic river intermodal transportation under the circumstance of blocked trans-provincial road transportation and railway transportation.

In the emergency of Shanghai step by step implementing lockdown and jurisdictional domestic trade docks coming to a standstill, Commerce Department of Tongling Non-ferrous, for the purpose of continuing International copper delivery, effectively communicated with warehousing company of Shanghai International Port (Group). With the approval of Anti-Pandemic Office and the support of Shanghai International Port (Group), Commerce Department of Tongling Non-ferrous was given a dock for temporary berthing, and was given a full-load-distance non-contact green channel from dock to bonded warehouse, thus enabling on-time goods delivery and customs clearance.

With robust measures and great support of Tongguan Jinyuan Futures Co., Ltd., Commerce Department of Tongling Non-ferrous was able to not only stay in smooth contact with Shanghai International Energy Trading Center, but also conquer the inconvenience resulting from SOHO of Shanghai and Tongling personnel. The entire procedure, from the operation of warehouse receipt key to the final creation of warehouse receipt, is paperless, which greatly saves delivery time. As of now, the delivery of International copper was successfully completed.