Pre-holiday stockpiling cools, spot premiums continue to pull back [SMM Shanghai spot copper]

SMM, September 24:

Today, SMM #1 copper cathode spot prices against the SHFE copper 2610 contract were quoted at premiums of 1,150-1,480 yuan/mt, with an average of 1,315 yuan/mt, down 25 yuan/mt from the previous trading day. In early trading, the SHFE copper 2610 contract retreated after a rapid rise before consolidating at lows. After the open, prices quickly surged to around 110,930 yuan/mt, then rapidly pulled back to around 110,620 yuan/mt. Copper prices subsequently rebounded, but upward momentum was limited, with futures mainly consolidating around 110,750 yuan/mt. During this period, prices briefly rebounded to around 110,900 yuan/mt, then moved sideways in a narrow range near midday, closing the morning session at 110,740 yuan/mt. The backwardation spread between adjacent months was 520-550 yuan/mt, and the import profit margin for SHFE copper against the 2610 contract for the current month was between a loss of 1,580 yuan/mt and a loss of 1,470 yuan/mt.

During the day, selling sentiment for copper cathode in Shanghai was 3.72, up 0.01 MoM, while purchasing sentiment was 2.75, down 0.92 MoM. Historical data can be queried in the database. At the start of early trading, suppliers initially quoted ONSAN, Xiangguang, Lufang, JCC, and others at premiums of 1,400-1,500 yuan/mt. High-quality copper such as Jinchuan plate and Jintun plate was quoted at premiums of 1,500-1,600 yuan/mt, while non-registered copper was quoted at premiums of 900-950 yuan/mt. Subsequently, suppliers lowered quotes to facilitate transactions, with standard-quality copper quoted at premiums of 1,250-1,300 yuan/mt, registered SX-EW copper BMK quoted at a premium of 1,100 yuan/mt, and non-registered copper quoted at premiums of 880-950 yuan/mt. In the second session, suppliers further lowered quotes, with premium-grade copper quoted at premiums of 1,100-1,200 yuan/mt and non-registered copper quoted at premiums of 750-850 yuan/mt.

Looking ahead to next week, SMM recorded social inventory in Shanghai at 46,300 mt, up 2,400 mt MoM, mainly due to the gradual arrival of some imported copper replenishing supply. Social inventory in Jiangsu was recorded at 18,200 mt, down 2,400 mt MoM, mainly due to relatively limited arrivals. Demand side, as some downstream enterprises have largely completed pre-holiday stockpiling, market purchasing enthusiasm has cooled noticeably. Spot transactions during the day were significantly weaker than the previous trading day, with market trading turning sluggish and suppliers forced to lower quotes to facilitate deals. According to SMM, during this year's National Day holiday, some downstream processing enterprises will have slightly more days off YoY, leaving relatively limited room for further restocking before the holiday. Meanwhile, high copper prices combined with a steep backwardation structure continue to strongly deter downstream procurement. Supply side, if imported cargoes continue to arrive at ports, the tightness in available market supply may ease somewhat. Overall, demand-side support is gradually weakening while supply-side conditions are marginally improving, and spot premiums are expected to continue edging down next week.