Available supply declines; Shanghai spot copper premiums dip before rebounding during the day [SMM SHFE copper spot]

SMM, September 17:

Today, spot premiums for SMM #1 copper cathode against the SHFE copper 2610 contract were quoted at a premium of 550-710 yuan/mt, with an average of 630 yuan/mt, down 15 yuan/mt from the previous trading day. In early trading, the SHFE copper 2609 contract opened lower with a gap and then continued to rise, with a slight correction during the session. The opening price was 107,640 yuan/mt. After the open, prices quickly moved lower, dipping to 107,480 yuan/mt, then rapidly rebounded to around 108,100 yuan/mt before a slight correction. Prices then rose quickly again, reaching an intraday high of 108,450 yuan/mt, and closed at 108,370 yuan/mt. The month-to-month backwardation spread was between 350 yuan/mt and 410 yuan/mt. The import profit margin for SHFE copper against the 2609 contract was between a loss of 480 yuan/mt and a loss of 410 yuan/mt.

During the day, sales sentiment for copper cathode in Shanghai was 2.90, up 0.12 MoM, and purchase sentiment was 2.92, up 0.27 MoM. Historical data can be queried in the database. At the start of early trading, suppliers initially quoted standard-quality copper at premiums of 550-650 yuan/mt, with Tiefeng and Yuguang quoting at a premium of 550 yuan/mt. Subsequently, suppliers sharply lowered their quotes, and Tiefeng, Yuguang, and others were quickly traded at premiums of 500-520 yuan/mt. Non-registered copper was mostly quoted at premiums of 300-400 yuan/mt. High-quality copper, such as Jintun plates, was quoted at a premium of 700 yuan/mt, and Jinchuan plates at a premium of 750 yuan/mt. In the second session, mainstream standard-quality copper supply in Shanghai was relatively tight. After low-priced cargoes were quickly traded, available supply became scarce, and suppliers raised their quotes accordingly. Standard-quality copper was mostly quoted at premiums of 630-650 yuan/mt, with transactions mainly at premiums of 570-640 yuan/mt.

Looking ahead to tomorrow, SMM recorded social inventory in Shanghai at 58,600 mt, down 2,500 mt WoW from Monday, while social inventory in Jiangsu was recorded at 20,800 mt, up 2,300 mt WoW from Monday. Overall social inventory saw a slight destocking. From a supply-demand fundamental perspective, a large volume of imported copper is expected to arrive later, which may put phased pressure on spot premiums. Downstream enterprises have low acceptance of the current high premiums, but due to tight supply of mainstream circulating cargoes in Shanghai, spot premiums for Shanghai copper fell first and then rose during the day. In addition, according to SMM, some downstream processing enterprises have begun stockpiling for the Mid-Autumn Festival and National Day holidays, with purchase willingness edging up slightly. Spot premiums for Shanghai copper are expected to remain at current high levels tomorrow, with a possibility of edging up slightly.