Low inventories, coupled with suppliers holding prices firm, push the center of Shanghai spot copper premiums to rise continuously [SMM Shanghai spot copper]

SMM July 21 News:

Today, SMM #1 copper cathode spot premiums against the current month 2608 contract were quoted at 430-510 yuan/mt, averaging 470 yuan/mt, up 35 yuan/mt from the previous trading day. Early trading saw the SHFE copper 2608 contract consolidate in a narrow range before trending higher. The contract opened at 104,730 yuan/mt, then mostly traded between 104,650 and 104,840 yuan/mt, later quickly rising to 104,950 yuan/mt, thereafter largely moving between 104,850 and 105,030 yuan/mt, and closed at 104,930 yuan/mt. The backwardation spread between the front-month contracts stood at 130-170 yuan/mt, while the import profit margin for SHFE copper against the 2608 contract was in a loss of 370-430 yuan/mt.

Intraday, sales sentiment for copper cathode in the Shanghai region registered 2.96, down 0.34 from the previous day, while purchasing sentiment came in at 2.92, down 0.20. Historical data can be found in the database. At the start of the morning session, suppliers offered standard-quality copper at premiums of 450-480 yuan/mt. Among them, Lufang and Xiangguang quoted premiums of 460-480 yuan/mt, while Zhongjin, Yuguang, and Tiefeng offered at 450 yuan/mt. High-quality copper such as Guixi, Jinchuan plate, and Jintun plate was offered at premiums of 480-520 yuan/mt. In the second trading session, downstream showed limited acceptance of current premiums, bidding for standard-quality copper at around 420 yuan/mt. Some deals were concluded after suppliers slightly lowered their offers. Available supplies of non-registered copper were also scarce, with offers at premiums of 250-300 yuan/mt.

Looking ahead to tomorrow, persistently low social inventory in Shanghai is keeping market availability of spot copper cathode tight, providing strong support for spot premiums. Copper prices edged up intraday, the backwardation structure narrowed to 140-170 yuan/mt, and suppliers showed strong inclination to hold prices firm and hold back from selling. During the day, standard-quality copper was offered at premiums of around 450-480 yuan/mt, up roughly 40 yuan/mt from yesterday. Downstream enterprises had limited appetite for cargoes near premiums of 450 yuan/mt, with procurement still driven primarily by rigid demand and bids mostly around 420 yuan/mt. However, traders continued to trade on expectations of tight available supplies, keeping cargo circulation relatively active and purchasing enthusiasm at a high level. Overall, amid an ongoing phase of tight available supply, spot premiums for Shanghai spot copper against the 2608 contract are expected to remain at premiums tomorrow, with the overall center likely edging up further.