SMM, October 9:
Today, SMM #1 copper cathode spot prices against the SHFE copper 2610 contract were quoted at premiums of 380-700 yuan/mt, with an average premium of 540 yuan/mt, down 170 yuan/mt from the previous trading day. In early trading, the SHFE copper 2610 contract opened higher with a gap and then drifted higher. The opening price was 109,800 yuan/mt, and prices quickly rallied, successively breaking above 110,600 yuan/mt and 110,900 yuan/mt, reaching an intraday high near 111,100 yuan/mt. Copper prices then consolidated at highs and pulled back, dipping to around 110,850 yuan/mt, before rebounding slightly near midday to close the morning session at 110,910 yuan/mt. The month-over-month backwardation spread ranged from 920 yuan/mt to 1,040 yuan/mt, and the import profit margin for SHFE copper against the 2610 contract was between a loss of 320 yuan/mt and a loss of 180 yuan/mt.
During the day, selling sentiment for copper cathode in the Shanghai region was 3.38, up 0.53 MoM, while purchasing sentiment was 2.92, up 0.14 MoM. Historical data can be queried in the database. At the start of early trading, suppliers initially quoted ONSAN, Zijin, and Dajiang HS at premiums of 700 yuan/mt. Subsequently, suppliers sharply lowered their quotes in succession, with Zhongtiaoshan, Tiefeng, and Jintong Yusheng cutting quotes from premiums of 500 yuan/mt to 450 yuan/mt. Lufang and others traded at premiums of 600-620 yuan/mt, while non-registered copper was quoted at premiums of 300-350 yuan/mt. In the second session, suppliers further lowered quotes, with Tiefeng and Zhongtiaoshan quoting premiums of 350 yuan/mt, non-registered copper quoted at premiums of 180-250 yuan/mt, and high-quality copper Jintun large plates trading at premiums of 650-700 yuan/mt.
Looking ahead to next week, the month-over-month backwardation spread has widened significantly, and suppliers' willingness to sell has clearly increased, with quotes being lowered repeatedly during the day to facilitate transactions. On the supply side, some imported copper is expected to arrive gradually next week, and available supply in the market may increase. Meanwhile, as the delivery date approaches, near-month contracts are well supported, and the month-over-month backwardation is expected to remain at a relatively high level, with the possibility of further widening at certain stages, continuing to pressure spot premiums. On the demand side, under the current pattern of high copper prices, a wide backwardation spread, and spot prices still at premiums, some downstream processing enterprises are cautious about purchasing, with a strong wait-and-see sentiment in the market. Some buyers prefer to wait for spot premiums to pull back further before making purchases. Overall, with expectations of increasing supply at the margin combined with pressure from the high backwardation structure, spot premiums in the Shanghai region are expected to remain under pressure next week, continuing the overall downward trend. Going forward, close attention should be paid to actual arrivals of imported cargoes, changes in the futures spread before and after delivery, and downstream restocking at lower prices.
