Copper Prices Fall as Consumption Sees a Slight Uptick; Shanghai Spot Copper Premiums Stabilize at Highs [SMM Shanghai Spot Copper]

SMM News, August 18:

Today, SMM #1 copper cathode spot prices against the SHFE copper 2609 contract were quoted at premiums of 350–480 yuan/mt, with the average at a premium of 415 yuan/mt, up 335 yuan/mt from the previous trading day. In early trading, the SHFE copper 2609 contract weakened and fell, opening at 108,160 yuan/mt. After the open, prices continued to edge lower, stabilizing after hitting an intraday low of 107,650 yuan/mt, and mostly traded between 107,590 yuan/mt and 107,730 yuan/mt. The backwardation price spread between futures contracts ranged from 220 yuan/mt to 270 yuan/mt, while the import profit margin for SHFE copper against the 2609 contract for the current month ranged from a loss of 890 yuan/mt to a loss of 750 yuan/mt.

Intraday, in Shanghai, the sales sentiment for copper cathode was 3.1, up 0.21 MoM, while purchasing sentiment was 3.05, down 0.28 MoM; historical data can be queried in the database. At the start of morning trading, suppliers’ first round of offers for standard-quality copper was at premiums of 350–380 yuan/mt. Subsequently, offers increased, with JCC and others quoting a premium of 410 yuan/mt and deals done at a premium of 400 yuan/mt; Tiefeng, Zhongtiaoshan and others traded at premiums of 350–380 yuan/mt. High-quality copper, including Jinchuan (plate) and Jintun (plate), was quoted at premiums of 450–460 yuan/mt. Entering the second time window, some suppliers lowered quotes to facilitate transactions; standard-quality copper was basically traded at a premium of 350 yuan/mt, while non-registered copper traded at premiums of 160–230 yuan/mt.

Looking ahead to tomorrow, SHFE copper’s absolute price continued to pull back intraday, driving some downstream restocking on dips and the release of traders’ purchasing demand. Market transactions improved markedly versus yesterday, and standard-quality copper traded relatively smoothly around a premium of 350 yuan/mt, providing some support to the lower end of spot premiums. Overall, with copper prices pulling back to spur the release of rigid demand and the backwardation structure providing support, but elevated premiums limiting further rush to buy amid continuous price rise, Shanghai spot copper against the 2609 contract is expected to remain at premiums tomorrow, with the overall center likely to consolidate around current levels.