Inventory Declined Significantly Again, Driving Premiums Higher, but Actual Transactions Were Very Limited [SMM South China Spot Copper]

SMM, January 10:

Today, spot #1 copper cathode in Guangdong was quoted at a premium of 550-570 yuan/mt against the front-month contract, with an average premium of 560 yuan/mt, up 70 yuan/mt from the previous trading day. Hydro copper was quoted at a premium of 280-300 yuan/mt, with an average premium of 290 yuan/mt, down 50 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 75,755 yuan/mt, up 590 yuan/mt from the previous trading day, while the average price of hydro copper was 75,485 yuan/mt, up 470 yuan/mt from the previous trading day.

Spot market: Guangdong inventory ended its two-day increase and pulled back due to limited arrivals. As a result, suppliers continued to stand firm on quotes, with standard-quality copper quoted as high as 600 yuan/mt in the early session. However, with premiums being too high, downstream buyers only made sporadic purchases, forcing suppliers to lower premiums to facilitate sales. Additionally, imported copper continued to flow into the market today with relatively low quotes, which were well-received by the market. As of 11:00 am, premiums against the front-month contract were 570 yuan/mt for high-quality copper, 550 yuan/mt for standard-quality copper, and 280 yuan/mt for hydro copper.

Overall, the significant decline in inventory once again pushed premiums higher, but actual transactions remained limited. Arrivals are expected to increase over the weekend, and premiums are likely to pull back next week.

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