High backwardation coupled with tight available spot supply drives Shanghai spot copper premiums to a new high for the year [SMM Shanghai Spot Copper]

SMM, September 16:

Today, SMM #1 copper cathode spot prices against the SHFE copper 2609 contract were quoted at premiums of 580-710 yuan/mt, with an average premium of 645 yuan/mt, up 85 yuan/mt from the previous trading day. In early trading, the SHFE copper 2609 contract opened at 107,250 yuan/mt, edged down to 107,100 yuan/mt after the open, then began to rise. After a slight correction, the uptrend remained intact, with the price touching a session high of 107,700 yuan/mt before closing at 107,610 yuan/mt. The Back month spread stood at 340-400 yuan/mt, and the import profit margin for SHFE copper against the 2609 contract was at a loss of 180-280 yuan/mt.

During the day, selling sentiment for copper cathode in Shanghai was 2.78, up 0.03 MoM, while buying sentiment was 2.65, up 0.17 MoM. Historical data can be queried in the database. At the start of early trading, suppliers initially quoted standard-quality copper at premiums of 640-700 yuan/mt, then sharply lowered offers, quoting Tiefeng and Zhongtiaoshan at premiums of 580 yuan/mt. Non-registered copper was mostly quoted at premiums of 280-400 yuan/mt, while high-quality copper such as Jintun large plates was quoted at a premium of 700 yuan/mt. In the second trading session, mainstream standard-quality copper supply in Shanghai was relatively tight, and prices saw no significant changes.

Looking ahead to tomorrow, supply side, some imported copper may arrive in large volumes at ports, but it will still take time from vessel arrival, customs clearance, and warehousing to entering the spot market, making it difficult to have a material impact on the market in the short term. Currently, supply of major circulating brands in Shanghai remains tight, with mainstream standard-quality copper and high-quality copper staying in short supply, and suppliers still intend to hold prices firm. Demand side, copper prices continue to fluctuate at highs, and downstream enterprises are increasingly wary of high prices, with purchases mostly driven by rigid demand and limited capacity to absorb high premiums. In addition, the elevated Back month spread also provides some support to spot premiums. Overall, spot premiums are expected to stay high or edge down slightly tomorrow, with focus on the actual arrival pace of imported copper and changes in downstream buying sentiment.