Offers rise after holiday, inventory drawdown supports premium [[SMM Shanghai spot copper]]

SMM News on May 6:

       Today, SMM #1 copper cathode spot premiums against the May 2025 contract (2505) were reported at a range of RMB 250-320/mt, with an average premium of RMB 285/mt, up RMB 55/mt from the previous trading day. The SMM #1 copper cathode price was RMB 78,030-78,350/mt. In the early morning session, the SHFE copper 2505 contract briefly surged above RMB 78,100/mt before paring gains to below RMB 77,700/mt. It then rose again, returning above RMB 78,000/mt near the morning close and testing a high of RMB 78,200/mt. The SHFE copper backwardation (BACK) between consecutive months fluctuated within RMB 230-260/mt, narrowing from the last trading day before the holiday. As of the morning close, the import loss for the SHFE copper 2505 contract was RMB 484.34/mt.

       Spot premiums rose during the day, primarily due to normal cargo pick-up by downstream consumers during the Labour Day holiday but limited warehouse inflows, with imported supplies not replenished as expected. Tight spot supply led spot traders to quote premiums as high as RMB 300/mt. In the early morning session, mainstream standard-quality copper premiums were RMB 300-330/mt, while high-quality copper premiums were RMB 340-350/mt. At this time, some low-priced supplies were quickly traded at RMB 270-290/mt, with non-registered copper premiums at RMB 220-240/mt. Subsequently, trading at higher premiums was sluggish, and spot traders adjusted mainstream standard-quality copper premiums to RMB 270-290/mt, with concentrated trading at high-quality copper premiums of RMB 290-310/mt. Transaction prices for brands such as Tiefeng, Zhongtiaoshan, and Jinfeng fell, with premiums traded at RMB 220-240/mt. Entering the second trading session, copper prices rose, and downstream consumers pressed down premiums, with some low-priced supplies traded at premiums of RMB 210-230/mt.

       According to SMM data, copper cathode inventories in the Shanghai area were only 89,600 mt during the day, a decrease of 7,700 mt from the last trading day before the holiday. Amid the ongoing destocking trend, SHFE copper spot premiums will remain firm. However, attention should be paid to the impact of price spread changes on premiums as the contract rollover approaches.