Arrivals of imported supply combined with limited pre-holiday demand keep spot premiums expected to remain under pressure [SMM Shanghai Spot Copper]

SMM, September 28:

Today, SMM #1 copper cathode spot prices against the SHFE copper 2610 contract were quoted at premiums of 1,000-1,280 yuan/mt, with an average premium of 1,140 yuan/mt, down 175 yuan/mt from the previous trading day. In early trading, the SHFE copper 2610 contract opened lower with a gap, then bottomed out and rebounded, consolidating at lows overall. After the open, prices fell quickly to around 109,790 yuan/mt, then rebounded to around 110,070 yuan/mt. Subsequently, copper prices retreated after rapid rises several times, briefly touching a high of around 110,180 yuan/mt during the session, before the price center pulled back. Near midday, prices moved sideways in a narrow range of 109,950-110,000 yuan/mt, and the morning session closed at 109,970 yuan/mt. The backwardation spread between the front and next month contracts was 480-550 yuan/mt, and the import profit margin for SHFE copper against the 2610 contract with invoices dated this month was at a loss of 1,700-1,600 yuan/mt.

During the day, the selling sentiment for copper cathode in Shanghai was 3.15, down 0.57 WoW, while the purchasing sentiment was 2.78, up 0.03 WoW. Historical data can be queried in the database. At the start of early trading, suppliers initially quoted Lufang cargoes with invoices dated this month at a premium of 1,350 yuan/mt, while Dajiang PC, Dajiang HS, and Zijin were quoted at a premium of 1,200 yuan/mt for cargoes with invoices dated this month. SX-EW copper BMK was quoted at a premium of 1,000 yuan/mt for cargoes with invoices dated this month, and non-registered copper was quoted at premiums of 900-1,100 yuan/mt for cargoes with invoices dated this month. Subsequently, suppliers slightly lowered their quotes, with Dajiang PC and Dajiang HS quoted at a premium of 1,050 yuan/mt for cargoes with invoices dated this month. Tiefeng and others traded at a premium of 1,080 yuan/mt for cargoes with invoices dated next month, while BMK and others were quoted at a premium of 800 yuan/mt for cargoes with invoices dated this month. Non-registered copper was quoted at premiums of 700-900 yuan/mt for cargoes with invoices dated next month. In the second session, suppliers further lowered their quotes, with standard-quality copper quoted at a premium of 1,100 yuan/mt for cargoes with invoices dated this month and 1,000 yuan/mt for cargoes with invoices dated next month. High-quality copper such as Jinchuan plate and Jintun plate traded at premiums of 1,200-1,250 yuan/mt.

Looking ahead to tomorrow, SMM recorded social inventory in Shanghai at 51,200 mt, up 4,900 mt WoW from last Thursday, mainly due to the gradual arrival of some imported copper replenishing supply. Social inventory in Jiangsu was recorded at 15,300 mt, down 2,900 mt WoW from last Thursday, mainly due to low arrivals combined with normal cargo pick-up by some downstream processing enterprises. Intraday market trading was generally sluggish. Although downstream processing enterprises still had sporadic pre-holiday stockpiling demand, their purchasing enthusiasm was limited, with transactions mainly driven by rigid demand. Meanwhile, as imported supply in Shanghai gradually replenished, the tightness of available cargoes in the market eased somewhat. Suppliers showed a strong willingness to sell, and intraday quotes trended lower step by step. Currently, high copper prices and the relatively wide backwardation spread continue to restrain downstream purchasing. Shanghai spot premiums are expected to remain under pressure tomorrow, with a high likelihood of edging down slightly.