High copper prices continue to suppress demand; SHFE copper spot premiums remain under pressure [SMM SHFE copper spot]

SMM, September 9:

Today, SMM #1 copper cathode spot prices against the SHFE copper 2609 contract were quoted at premiums of 50-210 yuan/mt, with an average premium of 130 yuan/mt, down 35 yuan/mt from the previous trading day. The SHFE copper 2609 contract showed an overall drift lower. After the opening, prices quickly pulled back from above 111,800 yuan/mt. Although there was a subsequent rebound, upward momentum was insufficient, and the trading center continued to shift lower. The decline accelerated near midday, with prices dipping to around 111,200 yuan/mt, and the closing price was 111,190 yuan/mt. The backwardation spread between adjacent months was between 560 yuan/mt and 630 yuan/mt, and the import profit margin for SHFE copper against the 2609 contract for the current month was between a loss of 610 yuan/mt and a loss of 480 yuan/mt.

During the day, the selling sentiment for copper cathode in Shanghai was 2.99, down 0.46 MoM, and the purchasing sentiment was 2.65, down 0.33 MoM. Historical data can be queried in the database. At the start of the morning session, suppliers initially quoted standard-quality copper at premiums of 130-180 yuan/mt, with non-registered copper KFM and Somidez at parity. Subsequently, suppliers lowered their quotes to premiums of 80-160 yuan/mt. In the second session, suppliers continued to lower quotes, with Tiefeng and Zhongjin trading at premiums of 50-80 yuan/mt, and high-quality copper Jintun large plates trading at a premium of 200 yuan/mt. Registered SX-EW copper from Myanmar was quoted at a discount of 20 yuan/mt to a premium of 20 yuan/mt, while non-registered copper was quoted at discounts of 50-30 yuan/mt.

Looking ahead to tomorrow, SHFE copper prices have recently been running above 110,000 yuan/mt, and the dampening effect of high copper prices on end-user procurement is becoming more evident. Although some end-users, concerned that copper prices may continue to rise, made small restocking purchases when futures pulled back, overall procurement remained primarily need-based, with a strong wait-and-see sentiment in the market. By sector, orders at wire and cable enterprises were weak, with some enterprises showing reduced willingness to take on new orders, dragging on copper cathode purchases. Orders at copper foil enterprises were relatively stable, with demand resilience still intact, but their boost to overall spot consumption was relatively limited. Meanwhile, the backwardation spread between adjacent months widened further to 560-630 yuan/mt, and suppliers still faced pressure from position rollovers and selling. Standard-quality copper quotes were lowered repeatedly during the day before transactions occurred, reflecting that downstream acceptance of current high copper prices and spot premiums remains limited. Overall, under the combined influence of weak end-use demand, strong wait-and-see sentiment, and a backwardation structure fluctuating at highs, spot copper prices against the SHFE 2609 contract are expected to remain at premiums tomorrow, but the overall center may continue to edge lower. However, with some low-priced cargoes still finding need-based buying after transactions, further downside is expected to be relatively limited.