LME Base Metals Cash to 3-Month Backwardation/Contango (2017-9-7)

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the supply side may see a large volume of imported copper arriving at ports, but it will still take time from vessel arrival, customs clearance, and warehouse entry to entering the spot market, making it difficult to have a substantial impact on the market in the short term. Currently, supply of major circulating brands in the Shanghai region remains tight, with mainstream standard-quality copper and high-quality copper staying in short supply, and suppliers still showing willingness to hold prices firm. On the demand side, copper prices continue to fluctuate at highs, and downstream enterprises are increasingly fearful of high prices, with purchases mostly driven by rigid demand and weak acceptance of high premiums. In addition, the elevated backwardation in the price spread between futures contracts for the next month also provides some support to spot premiums. Overall, spot premiums are expected to stay high tomorrow, or edge down slightly, with focus on the actual arrival pace of imported copper and changes in downstream buying sentiment.