Imported copper arrivals pressure spot before delivery, premiums return to highs after contract rollover [SMM Shanghai spot copper weekly review]

This week, SHFE copper spot premiums fell first and then rose, with notable quote changes around the contract rollover. Early in the week, concentrated arrivals of imported copper in Shanghai, combined with sustained high backwardation between prompt months, prompted suppliers to sell actively. Spot prices against the SHFE copper 2610 contract gradually pulled back to near parity and then shifted to a slight discount. On Friday, after the quotation benchmark switched to the 2611 contract, the average spot premium rose to 825 yuan/mt. Intraday, a brief pullback in copper prices triggered some downstream purchasing, while tight availability of tradable cargoes also strengthened suppliers' willingness to hold prices firm. On the inventory side, as of October 15, social inventory in Shanghai stood at 70,200 mt, up 15,500 mt from last Thursday; Jiangsu recorded 22,000 mt, down 400 mt from last Thursday.

Looking ahead to next week, SHFE spot copper against the 2611 contract is expected to remain at elevated premiums, though upside may be constrained by the release of supply. From the supply side, limited low-priced tradable cargoes in the market still give suppliers a basis to hold prices firm. However, after delivery of the 2610 contract is completed, attention should be paid to the pace of warrant cancellations and the flow of delivered cargoes into the spot market. Combined with subsequent imported copper arrivals, supply pressure in the Shanghai market may gradually emerge. From the demand side, downstream purchasing sentiment improved on Friday, but with copper prices still at highs, whether new orders and restocking demand can be sustained remains to be seen. Overall, if delivered cargoes flow out slowly, spot premiums may continue to consolidate at highs in the short term; if warrants and imported supply are replenished in a concentrated manner while downstream purchases fail to increase correspondingly, the premium center may pull back.