Domestic Supply Tightness Pushes Premiums Higher in the Short Term, While Noticeable Price Spread Emerges in Surrounding Regions [SMM SHFE Spot Copper]

SMM, January 6:

Today, spot #1 copper cathode was quoted at a premium of 100-150 yuan/mt against the SHFE 2501 contract, with an average premium of 125 yuan/mt, up 40 yuan/mt from the previous trading day. Standard-quality copper traded at 73,850-73,980 yuan/mt, while high-quality copper traded at 73,870-74,010 yuan/mt. The SHFE copper 2501 contract rebounded significantly from last Friday, testing 74,050 yuan/mt in the early session before pulling back slightly, hovering around 73,900 yuan/mt overall. The price spread between the SHFE copper 2501 and 2502 contracts fluctuated between contango 20 yuan/mt and backwardation 20 yuan/mt.

In the early market, deliverable cargoes were scarce, and mainstream standard-quality copper was tight and priced high. At the beginning of the session, there were almost no offers for mainstream standard-quality copper, with a few deliverable cargoes quoted at a premium of 100-110 yuan/mt, and low-priced cargoes were quickly snapped up. High-quality copper, such as CCC-P, was quoted at a premium of 140-150 yuan/mt with limited transactions. Suppliers stood firm on quotes and were reluctant to sell, with a significant price spread between Shanghai and surrounding areas. During the main trading session, mainstream standard-quality copper prices remained high, with limited availability, while high-quality copper was quoted at a premium of 150 yuan/mt with some transactions. Hydro copper was scarce, with few offers, and imports were mostly non-registered cargoes. By 11 a.m., market quotes remained firm, with limited transactions for mainstream standard-quality copper.

According to the SMM survey, there was continuous inventory buildup in Shanghai over the past weekend, with imports mainly consisting of non-registered and hydro copper cargoes. There was a significant price spread between Shanghai and surrounding areas, and the actual transaction center was relatively low. Downstream buying interest only improved slightly from last Friday, and overall consumption showed a downward trend in terms of operating rates. Premiums are expected to stabilize tomorrow.