Arrival of imported copper suppresses premium, while high copper prices lead to weaker trading volume [SMM Shanghai spot copper]

SMM News on May 27:

       Today, the spot premiums for SMM #1 copper cathode against the current-month 2506 contract were reported at a premium of 100-200 yuan/mt, with an average premium of 150 yuan/mt, down 35 yuan/mt from the previous trading day. The SMM #1 copper cathode price range was 78,410-78,620 yuan/mt. In the morning session, SHFE copper prices jumped initially and then pulled back, reaching a high of 78,440 yuan/mt before sharply declining.

       During the day, spot premiums fell again, mainly due to the continuous arrival of imported copper and the generally weak purchasing sentiment in the downstream sector recently. In the morning session, the premiums for mainstream standard-quality copper were 120-140 yuan/mt, while high-quality copper was in short supply, with premiums of 180-220 yuan/mt. As importers sold their stocks, premiums for brands like Zijin and Tiefeng dropped to 80-100 yuan/mt, and the prices of mainstream standard-quality copper also fell. Market transactions were mainly focused on low-priced stocks, and by the second trading session, transactions in the Changzhou region weakened to a premium of 80 yuan/mt. There were some participants in the market lacking invoices today, with a price spread of 30-40 yuan/mt between current-month and next-month invoices.

      It is expected that there will still be imported copper shipments tomorrow, keeping overall spot premiums suppressed. However, with copper prices remaining high and no signs of widening price spreads between futures contracts, the convergence of spot premiums is expected to be limited.