Liquidity is "locked up". Shanghai spot copper premiums rise [SMM Shanghai spot copper]

SMM News on August 12:

Today, spot prices of SMM #1 copper cathode against the August 2508 contract were reported at a premium of 140-260 yuan/mt, with an average premium of 200 yuan/mt, up 50 yuan/mt from the previous trading day. The SMM #1 copper cathode price ranged from 79,070 to 79,230 yuan/mt. In the morning session, SHFE copper prices continued to rise from 78,870 yuan/mt, touching 78,980 yuan/mt multiple times. The forward-month spread continued to show a contango structure, fluctuating between C30 and C10.

Copper prices slightly declined during the day but did not attract excessive downstream procurement. Downstream buyers mainly engaged in just-in-time procurement, though procurement sentiment improved compared to yesterday. The procurement sentiment for copper cathode in the Shanghai area was 3.18, while the sales sentiment was 3.14. . Due to limited domestic arrivals, the willingness to sell among some smelters in east China continued to decline. The remaining cargoes were traded at lower prices in Jiangsu, with the price center moving upwards. According to exchanges, recent warehouse outflows have been good, and downstream just-in-time procurement also supports the premium. After entering the second trading session of the morning, transactions for cargoes from Xiangguang, Lufang, and JCC approached a premium of 180 yuan/mt, with some even reaching 200 yuan/mt. Recently, the bill market has seen significant space, locking up the liquidity of some cargoes, leading to a continuous rise in their premiums.

Looking ahead to tomorrow, with domestic arrivals expected to increase, the rise in premiums will be limited. However, due to the high purchase costs for suppliers in the past two days, it is expected that their willingness to sell at lower prices will decrease. Additionally, under the current contango structure, suppliers are unwilling to sell at lower prices, and their delivery willingness is also low.