Month-End Covering Demand Provides Support, Center of Shanghai Spot Copper Premiums Moves Slightly Higher [SMM Shanghai Spot Copper]

SMM, July 29:

Spot premiums for SMM #1 copper cathode against the SHFE copper 2608 contract were quoted at 230-330 yuan/mt today, with an average of 280 yuan/mt, up 5 yuan/mt from the previous trading day. The SHFE copper 2608 contract showed a sideways and consolidating trend in early trading, remaining relatively stable. The opening price was 104,950 yuan/mt, and after opening, prices mainly moved between 104,850 yuan/mt and 105,090 yuan/mt. The contract touched a session high of 105,090 yuan/mt before edging down to a low of 104,840 yuan/mt, with a closing price of 104,940 yuan/mt. The backwardation between the current month and next month contracts was in a range of 120-170 yuan/mt, and the import profit margin for the SHFE copper 2608 contract stood between a loss of 640 yuan/mt and a loss of 550 yuan/mt.

On the day, the sales sentiment for copper cathode in Shanghai was 3.05, up 0.14 MoM, while the procurement sentiment was 2.94, up 0.10 MoM. Historical data can be accessed in the database. At the start of early trading, suppliers initially offered standard-quality copper with invoices dated this month at a premium of 300-350 yuan/mt, and Tie Feng copper with invoices dated next month at a premium of 260 yuan/mt. Subsequently, suppliers lowered their offers slightly; for cargoes with invoices dated next month, offerings from brands such as Copper Pipe & Tube, Zhongjin, Tiefeng, Xikuang, and Yuguang were quoted at premiums of 230-300 yuan/mt. High-quality copper supply was scarce, with only a limited volume of Jintun large plates circulating, offered with invoices dated this month at a premium of 320 yuan/mt. Registered SX-EW copper from Myanmar was quoted at a premium of 150 yuan/mt. In the second trading session, suppliers further reduced their offers. Low-priced supply was hard to find in the market, with cargoes with invoices dated this month in the Shanghai region largely offered at a premium of around 300 yuan/mt. Non-registered copper was traded with invoices dated next month at premiums of 80-120 yuan/mt.

Looking ahead to tomorrow, downstream consumption is expected to remain primarily just-in-time procurement. However, inquiry and transaction enthusiasm improved compared to the earlier period, with procurement sentiment rebounding consecutively, which is expected to provide some support for spot premiums. Approaching month-end, some traders and suppliers still need to secure cargoes with invoices dated this month, showing relatively strong purchase willingness, but low-priced supply is hard to find in the market. Offers for standard-quality copper with invoices dated this month are mainly maintained near a premium of 300 yuan/mt. Meanwhile, quotes for cargoes with invoices dated next month and non-registered copper are relatively lower, and the price spread between invoices and brands remains distinct. Overall, with moderate downstream just-in-time procurement, month-end restocking demand for current-month invoices, and tight supply of low-priced cargoes, spot premiums for SHFE copper against the 2608 contract are expected to remain tomorrow, with the overall center likely to stabilize and shift slightly higher.