Significant Inventory Buildup After the Holiday as End-Use Demand Has Yet to Gain Momentum [SMM Shanghai Spot Copper]

SMM, February 6: Today, #1 copper cathode spot prices against the SHFE 2502 contract were quoted at a discount of 20 yuan/mt to a premium of 40 yuan/mt, with an average premium of 10 yuan/mt, up 20 yuan/mt from the previous trading day. Standard-quality copper traded at 76,080-76,350 yuan/mt, while high-quality copper traded at 76,100-76,370 yuan/mt. The SHFE copper 2502 contract rose sharply in early trading before fluctuating slightly, testing 76,370 yuan/mt at the session's start and fluctuating around 76,300 yuan/mt overall. The price spread between the SHFE copper 2502 and 2503 contracts ranged from C120 to C160 yuan/mt. Market activity slightly improved during the day, but downstream purchase willingness remained weak. In early trading, suppliers quoted mainstream standard-quality copper at on par with to a premium of 20 yuan/mt, and high-quality copper at a premium of 20-40 yuan/mt. During the main trading session, premiums continued to decline, with mainstream standard-quality copper trading at a discount of 10 yuan/mt to a premium of 10 yuan/mt, and high-quality copper trading at a premium of 10-30 yuan/mt in limited volumes. Hydro copper was scarce, with few offers available. By 11:00 a.m., spot premiums continued to fall, with mainstream standard-quality copper trading at a discount of 20 yuan/mt and high-quality copper trading at on par with to a premium of 20 yuan/mt in concentrated transactions. According to SMM, during the Chinese New Year holiday, domestic social inventories increased by over 100,000 mt, with approximately 75,000 mt in east China. In the short term, copper cathode supply remains ample, and downstream raw material and finished product inventories also accumulated during the holiday. Before terminal pick-up demand strengthens, premiums are unlikely to rise significantly.