Premiums Continue to Rise as Suppliers Hold Back Spot Copper [SMM SHFE Copper]

Published: Jan 9, 2025 12:04

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[SMM Spot Copper] During the day, mainstream standard-quality copper was quoted at a premium of 120-140 yuan/mt against the front-month contract, while high-quality copper was quoted at a premium of 150-170 yuan/mt. Week-on-week, the arrival of imported copper decreased, leading to tighter supply in the Shanghai market. Suppliers held back cargoes with a strong sentiment of reluctance to sell, and premiums remained firm due to some rigid demand. However, downstream orders in surrounding areas showed mediocre performance, impacted by the surge in copper prices. In the short term, premiums are expected to remain firm, but support from the consumption side is likely to weaken in the future.

SMM, January 9:

Today, spot #1 copper cathode was quoted at a premium of 120-170 yuan/mt against the SHFE 2501 contract, with an average premium of 145 yuan/mt, up 25 yuan/mt from the previous trading day. Standard-quality copper traded at 74,740-74,860 yuan/mt, while high-quality copper traded at 74,770-74,890 yuan/mt. The SHFE copper 2501 contract hovered at 74,660 yuan/mt in early morning trading and surged to test 74,830 yuan/mt in the second session. The price spread between the SHFE copper 2501 and 2502 contracts fluctuated at C10-C50 yuan/mt.

In the early morning market, available supply tightened further, and the overall premium center moved upward. Standard-quality copper with a premium of around 100-120 yuan/mt was snapped up instantly, while high-quality copper such as CCC-P with a premium of 140-160 yuan/mt was also quickly taken. The price difference between imported and domestically deliverable copper narrowed, with hydro copper quoted at parity to a premium of 20 yuan/mt. Suppliers held back cargoes and stood firm on quotes, leading to tighter market circulation. During the main trading session, standard-quality copper was partially traded at a premium of 130-140 yuan/mt, while high-quality copper saw partial transactions at a premium of 150-170 yuan/mt. Hydro copper was traded in small volumes at a premium of 30 yuan/mt. However, downstream consumption showed a weakening trend, with only some just-in-time procurement. The transaction center in areas surrounding east China remained basically flat compared to yesterday.

The weekly arrival of imported copper decreased compared to last week, tightening the supply of circulating goods in the Shanghai region. Suppliers exhibited a strong sentiment of holding back cargoes and standing firm on quotes, with premiums supported by some just-in-time demand. However, downstream orders in surrounding areas showed mediocre performance due to the surge in copper prices. Premiums are expected to remain firm in the short term, but weak support from the consumption side is anticipated in the future.

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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