Prices of the 12 copper futures contracts, which run from August 2016 to July 2017, on the Shanghai Futures Exchange closed Friday lower on the week at Yuan 37,470-37,820/mt ($5,633-$5,685/mt), slipping Yuan 570-720/mt.
The front month July contract closed at Yuan 37,490/mt Friday, down Yuan 640 from last Friday, while the most active September futures closed Yuan 710 lower at Yuan 37,470/mt.
Traded volume was 2,837,300 mt Friday, down 1.9% week on week.
Industry sources said Chinese domestic copper prices had remained low due to thin demand during the current seasonal lull despite recent news of some copper recycling plants in Henan province having to shut down for environmental checks.
China Nonferrous Metals Industry Association said on its website that after a State Council meeting back on July 6, environment protection inspectors then stationed in eight zones -- the autonomous regions in Inner Mongolia, Ningxia Hui, Guangxi, Jiangsu province in East China, Jiangxi Province in South China, Henan Province in Central China, as well as Yunnan Province in Central China -- with environment inspection expected to last for one month.
Meanwhile, copper stocks in the SHFE warehouses continued to fall for the second consecutive week.
The weekly deliverable inventories were 165,468 mt Friday, down 5.4% week on week, while on-warrant stocks totaled 71,135 mt, down 0.4% week on week. Deliverable stock is the amount of metal available in the warehouse. On- warrant stock is the amount of metal which is good for delivery.
The fall in stocks was mainly due to a drop in inventories in Shanghai warehouses, outweighing the rise in Guangdong.
Shanghai's deliverable stocks slipped to 123,083 mt Friday, down 8.3% from last Friday and its on-warrant stocks fell 4.2% week on week to 45,925 mt, while Guangdong's deliverable inventories grew 10.4% to 17,034 mt Friday and its on-warrant stocks rose 28.6% to 8,848 mt.
The other three warehouse locations are Jiangsu, Zhejiang and Jiangxi.
Jiangsu saw steady deliverable stocks at 22,326 mt but its on warrant stocks slipped 4.2% week on week to 15,912 mt, while both of Zhejiang's deliverable and on warrant inventories remained at 3,025 mt and 450 mt, respectively.
Jiangxi has no copper stocks at the moment.
Chinese sources said domestic copper stocks had remained high compared with the same period last year due to a surge in imports in the early part of the year when the devaluation of the yuan late last year had presented an arbitrage opportunity.
Sources said the current deliverable and on-warrant copper stocks at 165,468 mt and 71,135 mt, respectively Friday, were way higher than the 103,117 mt and 9,732 mt on July 31, 2015.
Sources also said copper stocks in the Shanghai bonded warehouses had been rising steadily by about 100,000 mt/month since January due to the imports in the early part of the year. There's no official data on copper stocks in these bonded warehouses but industry sources estimated them to be around 580,000 mt at end-June, down from around 620,000 mt at end-May.
