Shanghai: SMM reported that #1 copper cathode traded with premiums of 50-90 yuan/mt against SHFE 2305 copper contract on May 5, and with premiums of 0-80 yuan/mt over the contract on May 12 Spot premiums fell initially and then rose last week, affected mainly by SHFE copper prices and the price spread between the SHFE front-month and next-month contracts. Market uncertainties over copper prices have kept downstream buyers and end-users cautious in purchasing. Therefore, downstream buying interest improved amid lower copper prices but they did not restock excess inventories. According to SMM statistics, social inventories in mainstream Chinese markets declined noticeably last week. Inventories in Shanghai fell by 9,100 mt due mainly to fewer arriving shipments of domestic cargoes and increased shipments leaving warehouses. At the end of the week, the spot premiums expanded, and the backwardation of the SHFE front-month copper contract over the SHFE next-month copper contract exceeded 200 yuan/mt. After delivery of the SHFE May copper contract this week, spot premiums should rise before falling.
Shandong: Spot discounts were initially low and then rose last week, rebounding to 90 yuan/mt at the week’s end. Sellers lowed prices after smelters sold off cargoes at lower prices early last week. Spot discounts fell to 130 yuan/mt. As copper prices fell sharply, downstream processing companies restocked cargoes on Thursday last week, helping spot quote rebound. Dip buying last Friday prompted sellers to raise prices. Some enterprises are concerned that copper prices will drop further, and end-user demand is currently weak. In this scenario, spot quotes in Shandong are unlikely to rebound further this week.
Spot quotes in north China inched higher before rallying last week. Spot copper was quoted with discounts of 230-50 yuan/mt, or an average discount of 140 yuan/mt last Friday, flat from two Fridays ago. Last week, the social inventory in Tianjin increased slightly, mainly due to the overall weak downstream consumption. Sellers lowered prices in the first half of the week. Downstream buyers standing on the sidelines prevented spot quotes from rising even as copper futures prices fell last Thursday. Trades improved last Friday after copper prices fell below 65,000 yuan/mt, bolstering spot quotes. Inventories in north China have not seen a pivot, thus spot quotes are unlikely to improve noticeably.
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![Copper Price Fluctuations Disturb the Market; North China Premiums Consolidate and Pull Back [SMM North China Copper Cathode Spot Weekly Review]](https://imgqn.smm.cn/usercenter/NUcrH20251217171713.jpeg)
