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

Published: Jan 6, 2025 13:31

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[SMM Spot Copper] During the day, mainstream standard-quality copper was quoted at a premium of 100-120 yuan/mt against the front-month contract, while high-quality copper was quoted at a premium of 120-150 yuan/mt. According to the SMM survey, inventory buildup continued in the Shanghai region over the past weekend, with imported supplies mainly consisting of non-registered and wet-process materials. There was a significant price spread between Shanghai and surrounding areas, and the actual transaction center was relatively low. Downstream buying slightly improved compared to last Friday, but overall consumption showed a pullback based on operating rates. Premiums are expected to stabilize tomorrow.

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.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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