SHANGHAI, Apr 12 (SMM)—Spot trades in Shanghai were subdued initially before improving last week as SHFE copper prices fluctuated at high levels. Trades were quiet in the two days following the Qingming Festival holidays due to sufficient pre-holiday stockpiling. Sellers refrained from lowering prices sharply, with spot discounts of around 20 yuan/mt. Buyers and sellers returned to a standstill. Dip buying interest rose after SHFE copper prices fell to 66,300 yuan/mt on Thursday, turning spot discounts into premiums. The price spread between the SHFE front-month and next-month copper contracts expanded to 140-150 yuan/mt on Friday, bolstering quotes for high-quality copper before delivery. This combined with significant declines in copper inventories pushed up spot premiums further.
In Shandong, quotes improved as downstream consumption picked up from the end of March. However, quotations by smelters were mixed. Some smelters quoted a premium of up to 20 yuan/mt at the end of the week against limited finished product inventory. Some smelters had a backlog of inventory and quoted with discounts of 80 yuan/mt. Spot premiums in Shandong are expected to stop falling in April.
In north China, spot quotes edged up last week. Spot copper was quoted with discounts of 300-240 yuan/mt, or an average discount of 270 yuan/mt, on April 2, and was quoted with discounts of 270-210 yuan/mt, or an average discount of 240 yuan/mt on April 9, up 30 yuan/mt. Smelters and traders have been selling at high prices since after the Qingming Festival holiday. However, significant gains in copper prices limited increases in premiums. Downstream buyers lacked buying interest against high copper prices. Overall supply pressure in north China weakened. This together with continued improvement in downstream consumption will bolster spot premiums in north China.
Spot quotes in Guangdong continued to fall last week, driven by weak consumption post-holidays and continued inventory increases. As of April 9, spot premiums for high-quality copper fell 30 yuan/mt from April 2 to 40 yuan/mt, and discounts for standard-quality copper stood at 20 yuan/mt, a decline of 60 yuan/mt. Hydro-copper was quoted with discounts of 70 yuan/mt, 60 yuan/mt lower than a week earlier. On Friday, the price spread between the price spread on standard-quality copper between Shanghai and Guangdong shrank 20 yuan/mt to 20 yuan/mt, leaving no opportunities for cargo transfer.
As of Friday April 9, total inventories in Guangdong stood at 72,900 mt, an increase of 909 mt from April 2, growing after three consecutive weeks of declines. The decline in shipments from warehouses exceeded that in shipments arrivals last week. Arriving shipments decreased 2,700 mt to 14,600 mt, much lower than the weekly average of 18,200 mt for 2020, due mainly to limited arriving shipments of domestic and imported copper. Shipments from Guangdong decreased 7,000 mt to 13,800 mt, well below the weekly average of 18,100 mt in 2020. Many copper rod factories undertook maintenance during Qingming Festival holidays and some of them have not resumed production, causing sharp declines in shipments from Guangdong. Those enterprises will resume normal production this week and this will increase copper consumption. This combined with a big price spread between the SHFE front-month and next-month contracts will buoy spot premiums. As such, spot premiums are expected to inch higher this week.
![Copper Inventories in Major Regions of China Continued Destocking During the Week [SMM Weekly Data]](https://imgqn.smm.cn/usercenter/gCNEi20251217171715.jpeg)
