Spot Copper Premiums Rose amid Narrowing SHFE Contract Spread and Failing Copper Import Expectations

SHANGHAI, Sep 6 (SMM) - Spot copper cathode was quoted at premiums of 380-440 yuan/mt over SHFE 2209 in Shanghai, with an average of 410 yuan/mt, up 10 yuan/mt from the previous day. SMM #1 copper cathode was reported at 61,660-61,880 yuan/mt, standard-quality copper 61,660-61,830 yuan/mt, and good-quality copper 61,680-61,880 yuan/mt. SHFE 2209 opened at 61,390 yuan/mt today, and then rose to a brief high of 61,580 yuan/mt. The contract moved between 61,200-61,500 yuan/mt in morning trade, and finally closed the session at 61,400 yuan/mt. 

Mainstream standard-quality copper was originally in premiums of 380-390 yuan/mt in pre-market trade, and the spread between good and standard-quality copper stood at 10 yuan/mt. The brand Guixi was stable in premiums which stood at 450-480 yuan/mt despite scarce sources available in the market. Mainstream hydro-copper was generally in premiums of 320-330 yuan/mt in the morning. Nonetheless, as the transactions picked up and market sources were still low, the cargo holders began to hike the premiums on the back of narrowing SHFE 2209 and 2210 contract spread compared with a day ago. Sources of mainstream standard-quality copper with premiums of 380-390 yuan/mt disappeared even before the morning session ended. When the morning session was about to end, standard-quality copper was generally in premiums of over 400 yuan/mt, and the spread between good and standard-quality copper expanded to 20 yuan/mt. Some standard-quality copper was once quoted in premiums of 450 yuan/mt, alluding the traders’ strong willingness to hold the prices firm.

In addition, the expected customs clearance of imported copper failed to release, and the SHFE 2209 and 2210 contract spread also narrowed to some extent, providing solid ground for traders to hike the premiums. Nonetheless, the market players were hesitant in accepting the high premiums, especially when the copper imports are still expectable in the near term and the delivery cycle of SHFE 2209 is approaching.