Warrants have not yet flowed out significantly; spot premiums edge down under high backwardation [SMM Shanghai spot copper]

Published: Oct 19, 2026 13:28 (GMT+8)

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[SMM SHFE Copper Spot] Looking ahead to tomorrow, suppliers continued to lower quotes during the day to facilitate transactions, but no large-scale inflow of previously delivered warrants into the spot market has been seen yet, and available supply in the Shanghai region remains relatively limited. Some delivered cargoes are expected to be released gradually from this afternoon to tomorrow. If warrants are canceled and flow into the spot market, the tightness on the supply side may ease somewhat, putting some pressure on spot premiums. Meanwhile, some suppliers have limited willingness to sell at low prices, and sentiment to hold prices firm and hold back from selling persists, providing some support to spot premiums. On the demand side, downstream processing enterprises overall still mainly make just-in-time procurement, with limited acceptance of high copper prices and high premiums and little willingness to chase higher prices. Overall, Shanghai spot premiums are expected to continue to consolidate at highs tomorrow. If the outflow of delivered warrants increases, the center of premiums may edge lower further. Going forward, close attention should be paid to the pace of warrant outflows, changes in the next-month backwardation, and actual downstream purchasing performance.

SMM, October 19:

Today, SMM #1 copper cathode spot prices against the SHFE copper 2611 contract were quoted at premiums of 620-800 yuan/mt, with an average premium of 710 yuan/mt, down 115 yuan/mt from the previous trading day. In early trading, the SHFE copper 2611 contract opened higher with a gap and then drifted higher. After the open, prices quickly rose to around 109,900 yuan/mt, then consolidated repeatedly within the 109,800-109,950 yuan/mt range. Mid-session, copper prices rallied again, peaking near 110,140 yuan/mt, before retreating after the rapid rise and pulling back to around 109,900 yuan/mt near midday, closing the morning session at 109,900 yuan/mt. The backwardation spread between the front and next month contracts stood at 680-700 yuan/mt, while the import profit margin for SHFE copper against the 2611 contract was at a loss of 500-570 yuan/mt.

During the day, the selling sentiment for copper cathode in the Shanghai region was 3.11, down 0.01 MoM, while the purchasing sentiment was 3.03, up 0.02 MoM. Historical data can be queried in the database. In the first round of quotes, suppliers offered Zhongjin, Zhongtiaoshan, Tiefeng, and Dajiang HS at premiums of 680-700 yuan/mt, while non-registered copper such as NOR and KCC was quoted at premiums of 500-570 yuan/mt. Subsequently, suppliers lowered their quotes, with Zhongjin, Zhongtiaoshan, and Jintong Yusheng quoted at a premium of 620 yuan/mt. Lufang, JCC, and other scarce cargoes held firm at premiums around 750 yuan/mt, while high-quality Guixi copper was quoted at a premium of 800 yuan/mt. Entering the second session, suppliers further lowered their quotes, with Yuguang, Zhongjin, Zhongtiaoshan, and other Changzhou-origin cargoes quoted at a premium of 600 yuan/mt; Honglu was quoted at premiums of 530-600 yuan/mt. Non-registered copper was quoted at premiums of 450-500 yuan/mt.

Looking ahead to tomorrow, suppliers lowered quotes throughout the day to facilitate transactions, but no large-scale inflow of previously delivered warrants into the spot market has been seen yet, and available supply in the Shanghai region remains relatively limited. Some delivered cargoes are expected to be released gradually from this afternoon to tomorrow. If warrants are canceled and flow into the spot market, the supply tightness may ease somewhat, putting some pressure on spot premiums. At the same time, some suppliers have limited willingness to sell at low prices, and the sentiment of holding prices firm and holding back from selling persists, providing some support for spot premiums. Demand side, downstream processing enterprises overall continue to make just-in-time procurement, with limited acceptance of high copper prices and high premiums, and little willingness to chase higher prices. Overall, spot premiums in the Shanghai region are expected to continue to consolidate at highs tomorrow. If the outflow of delivered warrants increases, the premium center may edge slightly lower. Going forward, close attention should be paid to the pace of warrant outflows, changes in the backwardation spread between front and next month contracts, and actual downstream purchasing performance.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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