This week, Shanghai spot copper premiums fell before rising. Early in the week, suppliers lowered offers to facilitate transactions, pulling the average spot premium back to 210 yuan/mt. However, east China inventory saw a significant weekly drawdown, coupled with port congestion and some shipment delays, which limited the replenishment of imported cargoes. The opening of the export window also diverted domestic supply. From mid-week onward, available supply in the market continued to tighten, and lower-priced cargoes were traded quickly. Approaching month-end, some traders had invoice demand, causing the invoice spread to gradually widen. Suppliers grew more inclined to hold prices firm and hold back from selling, pushing the average premium up to 450 yuan/mt. SMM data showed that as of August 27, social inventory in Shanghai stood at 72,300 mt, down by 10,800 mt from last Thursday. Inventory in Jiangsu was 20,900 mt, down by 6,600 mt from last Thursday. The combined inventory decline for the two regions totaled 17,400 mt.
Looking ahead to next week, Shanghai spot copper premiums are expected to stay high, but the room for further upside may narrow. Supply side, current inventory levels remain low, and import losses have widened, so the subsequent arrival of overseas supply still needs monitoring. The widening Shanghai-Guangdong price spread could prompt some Guangdong cargoes to be diverted to Shanghai, but it will still take time for them to actually enter warehouses. Demand side, as a new procurement cycle begins, some downstream restocking demand may be released. However, with both copper prices and spot premiums at highs, the willingness to chase prices and purchase will remain suppressed. Meanwhile, entering the new month, the support for premiums from month-end invoice demand is likely to weaken. Overall, spot prices against the SHFE copper 2609 contract are expected to remain at a premium next week, with premiums consolidating at highs overall. Attention should be paid to the actual arrival of imported and inter-regional shipments.
