Year-End Effect Evident as Downstream Purchasing Desire Remains Sluggish; Spot Premiums Continue to Decline [SMM South China Spot Copper]

SMM, December 27:

Today, spot premiums for #1 copper cathode in Guangdong against the front-month contract were quoted at 280-300 yuan/mt, with an average premium of 290 yuan/mt, down 35 yuan/mt from the previous trading day. Spot premiums for hydro copper were quoted at 200-240 yuan/mt, with an average premium of 220 yuan/mt, down 20 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 74,550 yuan/mt, up 20 yuan/mt from the previous trading day, while the average price of hydro copper was 74,480 yuan/mt, up 35 yuan/mt from the previous trading day.

Spot market: Today, Guangdong inventory increased for the second consecutive day, but the growth was very limited due to scarce arrivals. In the early session, suppliers initially stood firm on quotes, with standard-quality copper quoted at a premium of 320 yuan/mt. However, downstream purchasing interest was sluggish, forcing suppliers to continuously lower prices, though the effect was minimal, and transactions remained inactive. As of 11:00 a.m., premiums for high-quality copper against the front-month contract were quoted at 300 yuan/mt, standard-quality copper at 280 yuan/mt, and hydro copper at 220 yuan/mt. Additionally, we learned that many copper rod enterprises plan to implement production cuts over the weekend, and inventory is expected to continue rising next week.

Overall, year-end effects were evident, with downstream purchasing interest remaining sluggish and spot premiums continuing to decline.

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