Spot Premiums Plummet as Downstream Bargain Down Purchasing Prices Amid Large Weekend Arrivals [SMM South China Spot Copper]

Published: Jan 13, 2025 11:30

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SMM, January 13: Today, spot premiums for #1 copper cathode in Guangdong against the front-month contract were quoted at 300-350 yuan/mt, with an average premium of 325 yuan/mt, down by 235 yuan/mt from the previous trading day. Spot premiums for hydro copper were quoted at 180-220 yuan/mt, with an average premium of 200 yuan/mt, down by 90 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 75,725 yuan/mt, down by 30 yuan/mt from the previous trading day, while the average price of hydro copper was 75,600 yuan/mt, up by 115 yuan/mt from the previous trading day.

Spot market: After the weekend, Guangdong inventory saw a significant increase, mainly due to higher arrivals and reduced outflows from warehouses. Following the sharp inventory increase, downstream buyers actively bargained down purchasing prices, forcing suppliers to lower prices for sales, leading to a steep drop in spot premiums. Additionally, as hydro copper had already been sold at lower prices last week, its decline today was limited, and the price spread between hydro copper and standard-quality copper narrowed significantly, returning to normal levels. As of 11:00 am, spot premiums for high-quality copper against the front-month contract were quoted at 350 yuan/mt, standard-quality copper at 300 yuan/mt, and hydro copper at 200 yuan/mt.

Overall, large arrivals over the weekend and downstream price bargaining caused a steep drop in spot premiums.

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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