Registered Warehouse Warrants Continue to Decline, but Poor Transactions Weaken Premiums [SMM SHFE Spot Copper]

SMM January 14 News:

Today, spot premiums for #1 copper cathode against the SHFE 2501 contract were quoted at 90-160 yuan/mt, with an average of 125 yuan/mt, down 40 yuan/mt from the previous trading day. Standard-quality copper traded at 75,430-75,560 yuan/mt, while high-quality copper traded at 75,470-75,590 yuan/mt. The SHFE copper 2501 contract fluctuated around 75,400 yuan/mt during the morning session. The price spread between the SHFE copper 2501 and 2502 contracts fluctuated between contango 20 yuan/mt and backwardation 20 yuan/mt.

As delivery approached, spot premiums declined, and early morning consumption lacked support. At the beginning of the morning session, mainstream standard-quality copper was quoted at premiums of around 100-130 yuan/mt, while high-quality copper, such as CCC-P and Jinchuan (plate), was quoted at premiums of 140-160 yuan/mt. Hydro copper was quoted at parity to premiums of 30 yuan/mt. Transactions slowed significantly compared to the previous day, with only some downstream buyers maintaining just-in-time procurement. As delivery neared, buyers were unwilling to accept high premiums. During the main trading session, mainstream standard-quality copper was quoted at premiums of 90-110 yuan/mt, while high-quality copper was quoted at premiums of 130-140 yuan/mt. After premiums declined, downstream buying interest slightly improved, but overall transactions remained weaker than before.

Today, the SHFE copper 2501 contract fluctuated between contango 20 yuan/mt and backwardation 20 yuan/mt against the 2502 contract. However, SHFE-registered warehouse warrants currently stand at only around 11,000 mt. The tight availability of deliverable goods provided some support for spot premiums, but overall market consumption remained weak. Spot premiums are expected to decline slightly tomorrow.