Copper prices saw a slight correction; spot premiums edged up after the backwardation between delivery months narrowed [SMM Shanghai spot copper]

SMM, November 2:

Today, SMM #1 copper cathode spot premiums against the SHFE copper 2611 contract were quoted at a premium of 1,150-1,450 yuan/mt, with an average of 1,300 yuan/mt, up 35 yuan/mt from the previous trading day. In early trading, the SHFE copper 2611 contract opened higher before drifting lower. After the open, prices quickly pulled back from around 108,200 yuan/mt to near 108,050 yuan/mt, then briefly rebounded, but upward momentum was limited. Copper prices subsequently weakened, with several small rebounds followed by further declines, breaking below 107,800 yuan/mt and 107,600 yuan/mt in succession. Near midday, prices dipped to a low of around 107,250 yuan/mt before rebounding slightly, closing the morning session at 107,290 yuan/mt. The backwardation spread between the front and next month contracts stood at 770-1,010 yuan/mt, while the import profit margin for SHFE copper against the 2611 contract was at a loss of 720-480 yuan/mt.

During the day, selling sentiment for copper cathode in Shanghai was 2.70, up 0.12 MoM, while procurement sentiment was 2.67, up 0.22 MoM. Historical data can be queried in the database. At the start of early trading, suppliers quoted standard-quality copper at premiums of 1,200-1,300 yuan/mt, non-registered copper at premiums of 800-850 yuan/mt, and high-quality Guixi copper at a premium of 1,500 yuan/mt. In the second session, suppliers lowered quotes slightly, with Tiefeng, Zhongjin, and Honglu quoted at premiums of 1,100-1,150 yuan/mt, while non-registered copper quotes fell to premiums of 650-750 yuan/mt.

Looking ahead to tomorrow, the current supply-demand weakness in the Shanghai spot market persists. On the supply side, available cargoes remain tight, with some suppliers holding limited inventories and showing little willingness to sell at low prices, providing some support for spot premiums. On the demand side, despite the notable pullback in SHFE copper prices during the day, procurement enthusiasm among downstream processing enterprises has yet to show significant improvement. Wait-and-see sentiment remains strong in the market, with some buyers concentrating their bids near a premium of 1,100 yuan/mt, creating a divergence from supplier quotes. Actual transactions remain primarily need-based. Meanwhile, the backwardation spread between the front and next month contracts fluctuated significantly during the day, widening to above 1,000 yuan/mt at one point. The wide spread combined with high spot premiums continued to push up procurement costs for downstream buyers, further suppressing market activity. Overall, tight available supply continues to support spot premiums, but weak demand and the high backwardation structure limit further upside. Spot premiums in Shanghai are expected to remain high tomorrow.