Spot premiums surge after delivery, but downstream users refrain from chasing high prices to purchase [SMM South China spot copper]

SMM, September 16:

Today in Guangdong, spot premiums for #1 copper cathode against the front-month contract: high-quality copper was quoted at a premium of 600 yuan/mt, up 480 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 480 yuan/mt, up 580 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 420 yuan/mt, up 530 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 107,815 yuan/mt, down 565 yuan/mt from the previous trading day, while the average price of SX-EW copper was 108,765 yuan/mt, down 600 yuan/mt from the previous trading day.

Spot market: Guangdong inventory edged up today, mainly due to poor consumption yesterday. After delivery, spot premiums rose sharply because of the huge price spread between futures contracts yesterday. In early trading, standard-quality copper briefly climbed to a premium of 500 yuan/mt, but downstream consumers were unwilling to purchase at such a large increase, so suppliers had to lower premiums to sell. However, with available supply still tight, suppliers were reluctant to cut prices significantly and only made a slight adjustment of 20 yuan/mt. Today, the purchasing sentiment for copper cathode in Guangdong was 2.51, up 0.08 from the previous trading day, while the selling sentiment was 2.75, up 0.05 from the previous trading day (historical data can be queried in the database).

Overall, spot premiums rose sharply after delivery, but downstream buyers did not chase higher prices, and overall trading remained moderate.