Data: SHFE, DCE market movement (Aug 2)

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, SMM recorded social inventory in Shanghai at 58,600 mt, down 2,500 mt WoW from Monday this week, while social inventory in Jiangsu was recorded at 20,800 mt, up 2,300 mt WoW from Monday this week, with overall social inventory edging lower. From a supply-demand fundamental perspective, a large volume of imported copper is expected to arrive later, which may exert phased pressure on spot premiums. Downstream enterprises have low acceptance of the current high premiums, but due to tight supply of mainstream circulating cargoes in Shanghai, SHFE copper spot premiums dipped first and then rose during the day. In addition, according to SMM, some downstream processing enterprises have started stockpiling for the Mid-Autumn Festival and National Day holidays, with purchase willingness edging up slightly. SHFE copper spot premiums are expected to remain at current high levels tomorrow, with a possibility of edging up slightly.

Copper prices trended lower this week, spurring improved downstream demand. Tight spot supply further bolstered sellers’ willingness to hold firm on prices. After contract rollover, Shandong spot copper cathode returned to a premium structure. As of Thursday, the average spot premium/discount was quoted at +430 RMB per tonne.