SMM, August 6:
Today, SMM #1 copper cathode spot prices against the SHFE copper 2608 contract were quoted at premiums of 120-240 yuan/mt, with an average premium of 180 yuan/mt, down 50 yuan/mt from the previous trading day. In early trading, the SHFE copper 2608 contract moved downwards after a higher opening before retreating after a rapid rise. The opening price was 107,980 yuan/mt; after opening, the price rose to 108,150 yuan/mt, then pulled back to 107,600 yuan/mt. After stabilizing, the price rose again, topping 108,150 yuan/mt during the session. In the second session, the price traded largely between 107,950 yuan/mt and 108,050 yuan/mt before dipping rapidly to close at 107,730 yuan/mt. The backwardation spread between the front-month and next-month contracts ranged from 90 yuan/mt to 170 yuan/mt, and the SHFE copper import profit margin against the 2608 contract ranged from a loss of 1,500 yuan/mt to a loss of 1,370 yuan/mt.
During the day, the sales sentiment for copper cathode in Shanghai was 3.14, up 0.04 MoM, and the procurement sentiment was 2.85, down 0.03 MoM. Historical data is available in the database. During the day, suppliers continuously lowered their quotations. Brands such as Tiefeng, Zijin, and Zhongtiaoshan quickly cut their offered premiums from 110-120 yuan/mt at the beginning of early trading to 80 yuan/mt, and then further to 40-50 yuan/mt. Prices subsequently stabilized. Brands such as Lufang, Xiangguang, and JCC cut their offered premiums from 150-160 yuan/mt to 60-80 yuan/mt. High-quality brands, including Jinchuan plate and Jintun plate, were initially offered at a premium of 160 yuan/mt but saw very few deals, prompting some suppliers to lower their offers to a premium of 120 yuan/mt. Available supply of registered SX-EW copper was relatively tight, as suppliers held prices firm and held back from selling. Due to the rapid drop in premiums for standard-quality copper, non-registered copper struggled to find deals, with transactions mainly concluded at discounts of 60-40 yuan/mt.
Looking ahead to tomorrow, SMM recorded a social inventory of 76,100 mt in Shanghai, down 900 mt MoM, and a social inventory of 20,500 mt in Jiangsu, up 400 mt MoM. Overall inventory in east China showed a slight destocking, lending some support to spot premiums. Meanwhile, as the export window for copper cathode opens, SMM has learned that some suppliers have begun organizing cargoes for export. Should actual exports increase in the subsequent period, this could divert some of China’s available spot supply. However, with SHFE copper prices remaining at elevated levels, actual downstream consumption is poor. During the day, transactions for standard-quality copper saw no marked improvement even after continuous downward adjustments in offer premiums, with market purchases still dominated by rigid demand. On balance, with slight destocking and export demand lending support, but weak domestic consumption continuing to weigh, spot premiums for SHFE copper against the 2608 contract are expected to hold firm tomorrow, with the overall center likely stabilizing at low levels. Monitoring the actual outflow scale of export cargoes is warranted.
![Copper prices continued to rise, downstream consumption was weak, spot trades were sluggish [SMM South China Copper Cathode Spot Weekly Review]](https://imgqn.smm.cn/usercenter/HaNSH20251217171714.jpeg)
![Copper social inventory edged up slightly, high copper prices weighed on downstream demand [SMM weekly data]](https://imgqn.smm.cn/usercenter/AbRbz20251217171711.jpg)
