LME Base Metals Cash to 3-Month Backwardation/Contango (2017-9-15)

Looking ahead to tomorrow, SMM recorded social inventory in Shanghai at 51,200 mt, up 4,900 mt WoW from last Thursday, mainly due to the gradual arrival of some imported copper replenishing supply. Social inventory in Jiangsu was recorded at 15,300 mt, down 2,900 mt WoW from last Thursday, mainly due to low arrivals combined with normal cargo pick-up by some downstream processing enterprises. Intraday market trading was overall sluggish. Although downstream processing enterprises still had sporadic pre-holiday stockpiling demand, purchasing enthusiasm was limited, with transactions mainly driven by rigid demand. Meanwhile, as imported supply in Shanghai gradually replenished, the tightness of available cargo in the market eased somewhat. Suppliers showed strong willingness to sell, and intraday quotes trended downward step by step. Currently, high copper prices and the relatively wide backwardation in the price spread between futures contracts continue to restrain downstream purchasing. Shanghai spot premiums are expected to remain under pressure tomorrow, with a high likelihood of edging down slightly.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, SMM recorded social inventory in Shanghai at 51,200 mt, up 4,900 mt WoW from last Thursday, mainly due to the gradual arrival of some imported copper replenishing supply. Social inventory in Jiangsu was recorded at 15,300 mt, down 2,900 mt WoW from last Thursday, mainly due to low arrivals combined with normal cargo pick-up by some downstream processing enterprises. Intraday market trading was generally sluggish. Although downstream processing enterprises still had sporadic pre-holiday stockpiling demand, their purchasing enthusiasm was limited, and overall transactions were dominated by rigid demand. Meanwhile, as imported supply in Shanghai gradually replenished, the tightness of available cargo in the market eased somewhat. Suppliers showed strong willingness to sell, and intraday quotes were gradually lowered. Currently, high copper prices and the relatively wide Back price spread between futures contracts continue to restrain downstream purchasing. Shanghai spot premiums are expected to remain under pressure tomorrow, with a high likelihood of edging down slightly.