Inventory has been declining continuously, but premiums remain poor, with the main reason being poor downstream demand [SMM spot copper in South China]

SMM News on July 24:

Today, in Guangdong, spot #1 copper cathode was quoted at a discount of 50 yuan/mt to a premium of 30 yuan/mt against the front-month contract, with an average discount of 10 yuan/mt, unchanged from the previous trading day. SX-EW copper was quoted at a discount of 110 yuan/mt to 90 yuan/mt, with an average discount of 100 yuan/mt, also unchanged from the previous trading day. The average price of #1 copper cathode in Guangdong was 79,625 yuan/mt, down 35 yuan/mt from the previous trading day, while the average price of SX-EW copper was 79,535 yuan/mt, also down 35 yuan/mt from the previous trading day.

Spot Market: Today, inventory in Guangdong continued to decline, primarily due to fewer arrivals. With inventory continuing to fall, suppliers intended to refuse to budge on prices when selling, but copper prices did not pull back, and downstream buyers had low willingness to restock. Ultimately, suppliers could only sell at prices unchanged from yesterday. As of 11 a.m., high-quality copper for the front-month contract was quoted at a premium of 30 yuan/mt, standard-quality copper at a discount of 50 yuan/mt, and SX-EW copper at a discount of 100 yuan/mt. Additionally, there are still many warrants currently. It is reported that the current warrant volume is 5,525 mt, down 4,348 mt from yesterday. The large number of warrants is also a significant factor suppressing premiums.

Overall, despite the continuous decline in inventory, premiums remain poor, primarily due to weak downstream demand.