SHFE Copper Prices Rise, Spot Premiums Fall under Pressure amid Weak Supply and Demand [SMM Shanghai Spot Copper]

SMM, July 22:

Spot premiums for SMM #1 copper cathode against the current-month 2608 contract stood at 350–440 yuan/mt, averaging 395 yuan/mt, up 35 yuan/mt from the previous trading day. In early trading, the SHFE copper 2608 contract fluctuated downward before stabilizing and rebounding. It opened at 106,640 yuan/mt, dropped in early trading to an intraday low of 106,080 yuan/mt, then stabilized and edged up to close at 106,340 yuan/mt. The month-over-month backwardation spread ranged from 70 yuan/mt to 120 yuan/mt, and the import profit margin for SHFE copper against the 2608 contract was between a loss of 520 yuan/mt and a loss of 630 yuan/mt.

During the day, selling sentiment for copper cathode in the Shanghai region was 2.99, up 0.03 MoM, while purchasing sentiment was 2.6, down 0.32 MoM; historical data can be queried in the database. At the start of early trading, suppliers offered standard-quality copper brands such as Lufang, Dajiang PC, Tiefeng, Jinfeng, and Zijin at premiums of 400–440 yuan/mt; they subsequently lowered offers slightly, with standard-quality copper like Jinfeng and Zijin quoted at a premium of 390 yuan/mt. High-quality copper such as Jinchuan plate and Guixi was offered at premiums of 480–490 yuan/mt. In the second session, some suppliers began offloading cargoes, pulling the overall premium center lower. Standard-quality copper brands like Jinguan, Jinxin, Zijin, and Jinfeng traded at premiums of 350–360 yuan/mt. Registered SX-EW copper supply was scarce, with only some Myanmar and BMKMOOK cargoes in circulation, quoted at premiums of 320–350 yuan/mt; non-registered copper traded at premiums of 220–240 yuan/mt.

Looking ahead to tomorrow, the SHFE copper 2608 contract gained further ground during the night session, trading largely between 106,000 yuan/mt and 106,800 yuan/mt. As both copper prices and spot premiums rose recently and the SHFE contract structure remained in backwardation, downstream purchase willingness weakened notably, with transactions dominated by rigid demand. According to SMM, some downstream processing enterprises plan production cuts or temporary suspensions amid elevated copper prices and accumulated finished product inventories, and the impact of weakening end-use consumption on the spot market is gradually emerging. Supplier behavior during the day, with offloading activity, drove the premium center lower. Taken together, with the combination of high copper prices and premiums suppressing downstream demand, along with increased willingness to sell among suppliers, spot premiums for SHFE copper against the 2608 contract are expected to persist tomorrow, though the overall center may edge down.