Copper prices break through the 110,000 yuan mark; Shanghai spot copper premiums remain under pressure [SMM Shanghai spot copper]

SMM, September 8:

Today, spot premiums for SMM #1 copper cathode against the SHFE copper 2609 contract were quoted at a premium of 90-240 yuan/mt, with an average of 165 yuan/mt, down 60 yuan/mt from the previous trading day. The SHFE copper 2609 contract showed an overall upward drift. After the opening bell, prices consolidated briefly around 110,500 yuan/mt, then quickly climbed and broke above 111,000 yuan/mt, reaching an intraday high near 111,300 yuan/mt. Prices then retreated from highs, dipping to around 110,900 yuan/mt, before rebounding again. Near midday, prices settled around 111,170 yuan/mt. The month-over-month backwardation spread stood between 430 yuan/mt and 550 yuan/mt, while the import profit margin for SHFE copper against the 2609 contract for the current month ranged from a loss of 860 yuan/mt to a loss of 750 yuan/mt.

During the day, selling sentiment for copper cathode in the Shanghai region was 3.45, up 0.24 MoM, while procurement sentiment was 2.98, up 0.29 MoM. Historical data can be queried in the database. At the start of early trading, suppliers initially quoted standard-quality copper at a premium of 150 yuan/mt, non-registered copper KFM and Somidez at a premium of 20 yuan/mt, and Almalyk at a premium of 50 yuan/mt. Suppliers then slightly lowered quotes to a premium of 120-130 yuan/mt. In the second session, suppliers continued to lower quotes, with Tiefeng and Zhongjin trading at premiums of 80-100 yuan/mt, and high-quality copper Jintun large plates trading at a premium of 220 yuan/mt.

Looking ahead to tomorrow, the SHFE copper 2609 contract surged higher and broke above the 110,000 yuan/mt mark. High copper prices significantly dampened downstream procurement, and end-users overall continued to make just-in-time procurement, showing weak willingness to chase prices. Although intraday procurement sentiment rebounded from the previous trading day, the main transactions were concentrated among traders, reflecting that downstream acceptance of current copper prices and spot premiums remains limited. On the other hand, available supply in the Shanghai market remains relatively tight compared with Jiangsu, with limited circulation of some brands, providing some support to the downside of spot premiums. Meanwhile, the month-over-month backwardation spread remains in the elevated range of 430-550 yuan/mt, and subsequent changes in the spread will continue to directly affect suppliers' position rollover and selling pace. Overall, with high copper prices suppressing end-use demand and suppliers lowering prices to facilitate transactions, while tight spot supply provides support, spot prices against the SHFE copper 2609 contract are expected to remain at a premium tomorrow, with the overall center likely to edge lower, but further downside room is relatively limited. Close attention should be paid to changes in the month-over-month backwardation structure.