Copper prices fluctuate at highs, suppressing end-user stockpiling before the peak season [SMM Secondary Copper Daily Review]

Looking ahead to tomorrow, SMM recorded a social inventory of 70,800 mt in the Shanghai region, down 12,300 mt compared to last Thursday; a social inventory of 16,300 mt in the Jiangsu region, down 4,100 mt compared to last Thursday. The combined inventory in the two regions in east China decreased by 16,400 mt, with the destocking magnitude exceeding market expectations. Supply side, affected by the persistently unfavorable SHFE/LME price ratio, port arrivals from outside China have decreased, and coupled with some shipment delays, the supplement of imported copper to the spot market has been relatively limited. Demand side, after last week's slight correction in copper prices, there was a release of dip-buying demand from downstream; at the same time, the backwardation price spread between futures contracts once widened, increasing suppliers' willingness to sell, and accelerating the flow of cargo in the market, collectively driving a significant decline in inventory. Although intraday buying sentiment rebounded, transactions for standard-quality copper only occurred after successive downward adjustments in offers, reflecting that downstream acceptance of higher premiums remains limited. On balance, against the backdrop of significant destocking in east China and low import arrivals providing support for premiums, while downstream still mainly adopts just-in-time procurement on dips and suppliers retain a willingness to sell, spot prices against the SHFE copper 2609 contract are expected to maintain a premium tomorrow, with the overall center likely to gradually stop falling and stabilize, and the room for further significant declines is relatively limited.

[SMM Shanghai spot copper] Looking ahead to tomorrow, SMM recorded social inventory in the Shanghai region at 70,800 mt, down 12,300 mt WoW from last Thursday; social inventory in the Jiangsu region at 16,300 mt, down 4,100 mt WoW from last Thursday. Inventory in the two regions in east China totaled a reduction of 16,400 mt, with destocking exceeding market expectations. Supply side, due to the persistently unfavorable SHFE/LME price ratio, port arrivals of ex-China cargoes have decreased, and combined with some shipping schedule delays, imported copper has provided relatively limited supplementation to the spot market. Demand side, after copper prices experienced a slight correction last week, downstream dip-buying demand was released. Meanwhile, the backwardation spread between consecutive months once widened, enhancing suppliers' willingness to sell and accelerating market cargo turnover, jointly driving a significant inventory decline. Intraday buying sentiment rebounded to some extent, but quotes for standard-quality copper still required successive downward adjustments before transactions could occur, reflecting that downstream buyers' acceptance of high premiums remains limited. Overall, against the backdrop of significant destocking in east China inventory and low imported arrivals supporting premiums, while downstream buyers mainly engage in dip-buying and just-in-time procurement and suppliers' willingness to sell persists, spot prices against the SHFE copper 2609 contract are expected to maintain premiums tomorrow, with the overall center likely to gradually stop falling and stabilize. The room for further significant declines is relatively limited.