Market Primarily Executed Long-Term Contracts, Spot Copper Trading Sluggish [SMM North China Spot Copper]

Looking ahead to next week, on the supply side, some delivery warrants have already begun to flow out during the day, suppressing spot premiums. Market concerns over the concentrated release of warrants going forward persist, and suppliers have a strong willingness to sell, putting spot premiums for SHFE copper under pressure. On the demand side, and downstream procurement was mainly driven by rigid demand, with insufficient willingness to chase higher prices. In addition, the spot premium price spread between Shanghai and Guangdong continued to rise to around 150 yuan/mt during the day. The strong premiums in Guangdong may provide some support to Shanghai market sentiment, but it is difficult to reverse the overall weak supply-demand pattern in the short term.

[SMM Copper Wire and Cable News] This week, the SMM copper wire and cable enterprise operating rate was 69.43%, up 0.95 percentage points WoW. The stabilization in operating rates was mainly driven by orders from top-tier enterprises, while small and medium-sized enterprises continued to underperform. The power sector provided notable support, with steady demand from computing power, AI, and new energy sectors. Looking ahead to next week, high copper prices are expected to suppress new orders, and as earlier backlog orders are gradually completed, the operating rate is expected to pull back slightly. However, State Grid's successive order placements will provide support, and SMM expects the operating rate to decline 0.57 percentage points WoW to 68.86%.

[SMM Copper Wire and Cable Inventory] Regarding copper wire and cable inventory this week, enterprises' raw material procurement remained driven primarily by rigid demand. Some enterprises held bullish expectations for subsequent copper prices and restocked in small quantities across multiple batches at relatively low price levels, resulting in a 1.08% WoW increase in raw material inventory. On the finished product side, some clients also had bullish sentiment, and coupled with State Grid placing orders and picking up goods, finished product inventories decreased slightly by 1.74%.