Month-end transactions were quiet, Shanghai spot copper premiums fell under pressure [SMM Shanghai spot copper]

SMM Jul 28 News:

Today, spot #1 copper cathode premiums against the SHFE 2608 contract were quoted at 230–320 yuan/mt, averaging 275 yuan/mt, down 5 yuan/mt from the previous trading day. The SHFE copper 2608 contract opened lower with a gap during the morning session and then consolidated sideways. The opening price was 105,220 yuan/mt; after opening, prices continued to decline, dipping to 104,860 yuan/mt, then rebounded slightly, trading mainly between 104,900 yuan/mt and 105,070 yuan/mt, with a closing price of 104,990 yuan/mt. The backwardation spread between the front month and next month ranged from 110 yuan/mt to 170 yuan/mt, and the import profit margin for SHFE copper against the 2608 contract stood between a loss of 660 yuan/mt and a loss of 750 yuan/mt.

During the day, the selling sentiment for copper cathode in the Shanghai region was 2.91, down 0.03 MoM, while the purchasing sentiment was 2.84, up 0.10 MoM. Historical data can be found in the database. At the beginning of the morning session, suppliers first offered standard-quality copper with invoices dated this month at premiums of 300–310 yuan/mt, and offered Tiefeng brand with invoices dated next month at a premium of 260 yuan/mt. Subsequently, suppliers slightly lowered their quotes; brands such as Zijin, Yuguang, and Dajiang HS were transacted with invoices dated this month at premiums of 290–300 yuan/mt. High-quality copper, including Jinchuan plate and Jintun plate, was quoted at premiums of 330–360 yuan/mt with invoices dated this month. Entering the second session, suppliers further reduced their offers; brands like JCC, Zhongjin, Zhongtiaoshan, and Tiefeng were transacted with invoices dated next month at premiums of 230–260 yuan/mt. Registered SX-EW copper, such as Myanmar brand, was offered at premiums of 160–180 yuan/mt with invoices dated next month.

Looking ahead to tomorrow, the SHFE copper price pulled back during the day, encouraging some downstream buyers to inquire and purchase at lower prices, which provided a slight boost. As a result, purchasing sentiment in the Shanghai region rebounded somewhat from the previous trading day. However, according to SMM, end-user orders are still mostly clustered around the 104,500 yuan/mt level, leaving a gap between spot transaction prices and downstream psychological price levels, which limits actual demand growth. Approaching month-end, some buyers still need to secure cargoes with invoices dated this month, and the relative tightness of these supplies lends some support to their quoted prices. In contrast, the market for next-month invoices is more ample, with a stronger willingness to sell among suppliers; the price spread between these two types of invoices is expected to persist. Taken together, with the dip-buying supported by the price pullback and demand for current-month invoices, yet capped by limited improvement in end-use consumption, spot prices for SHFE copper against the 2608 contract are expected to remain at a premium tomorrow, with the overall center fluctuating narrowly around current levels.