Inventory Rises and Downstream Consumption Weakens, Spot Premiums Pull Back [SMM South China Spot Copper]

SMM News, December 23:

Today, spot premiums for #1 copper cathode in Guangdong against the front-month contract were quoted at 200-250 yuan/mt, with an average premium of 225 yuan/mt, down 30 yuan/mt from the previous trading day. Spot premiums for hydro copper were quoted at 120-180 yuan/mt, with an average premium of 150 yuan/mt, also down 30 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 74,400 yuan/mt, up 440 yuan/mt from the previous trading day, while the average price of hydro copper was 74,325 yuan/mt, also up 440 yuan/mt.

Spot market: After the weekend, Guangdong inventory ended its four-day decline and began to rise again, mainly due to increased arrivals. Both inventory and copper prices rose, and downstream buyers were reluctant to purchase in large quantities, forcing suppliers to lower prices to sell. As of 11:00 a.m., premiums for high-quality copper against the front-month contract were quoted at 250 yuan/mt, standard-quality copper at 200 yuan/mt, and hydro copper at 150 yuan/mt. We expect inventory to gradually increase in the future, and premiums are likely to continue declining.

Overall, with rising inventory and weakening downstream demand, spot premiums have pulled back and are expected to have further room for decline.

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