SMM, October 12: Spot premiums for copper cathode in east China pulled back rapidly during the day, with the transaction center shifting from around a premium of 400 yuan/mt in early trading to around 50–80 yuan/mt. SMM recorded social inventory in Shanghai at 66,500 mt, up 11,800 mt WoW, mainly due to concentrated arrivals of imported copper, which further eased the tightness of available supply in the market. Social inventory in Jiangsu stood at 19,800 mt, down 2,600 mt WoW, mainly due to fewer arrivals of domestic supply and normal cargo pick-up by downstream buyers.
Approaching delivery, as of midday, open interest in the SHFE copper 2610 contract was about 31,000 lots, with SHFE copper warrants at over 8,000 mt, while the backwardation between prompt and next-month contracts remained high. Suppliers showed strong willingness to sell, continuously lowering quotes to facilitate transactions. High copper prices combined with the wide price spread between futures contracts suppressed downstream purchasing enthusiasm, and processing enterprises mainly made just-in-time procurement. With replenishment from imported supply and active selling by suppliers, Shanghai spot premiums are expected to remain under pressure tomorrow and may pull back slightly further.
