Imported copper supplements downstream counteroffers significantly, SHFE copper spot premiums decline [SMM Shanghai Spot Copper]

SMM August 19:

       Today, SMM #1 copper cathode spot prices against the current month 2509 contract were at a premium of 140-250 yuan/mt, with an average quote at a premium of 195 yuan/mt, down 30 yuan/mt from the previous trading day; SMM #1 copper cathode prices were 79,010-79,190 yuan/mt. In the morning, SHFE copper rose from 78,820 yuan/mt to 78,970 yuan/mt and then fluctuated within a range, closing at 78,940 yuan/mt in the morning. The price spread between futures contracts for the next month widened from around 20 yuan/mt to 50 yuan/mt, and the import loss for SHFE copper for the current month was over 200 yuan/mt.

       Sentiment for both selling and purchasing weakened during the day, with the procurement sentiment for electrolytic copper in Shanghai at 3.13 and the sales sentiment also at 3.13. In the morning, suppliers quoted standard-quality copper at a premium of 200-230 yuan/mt, which was difficult to trade, and the center subsequently declined; high-quality copper remained firm, with CCC-P and Jinchuan (plate) at a premium of 220-250 yuan/mt. In Changzhou, some suppliers initially quoted a premium of 80 yuan/mt, while most market quotes were at a premium of 120 yuan/mt; thus, downstream buyers expected to negotiate, leading to weaker transactions in Jiangsu during the day. The increase in electrolytic copper purchases in Anhui, Jiangxi, and Zhejiang due to scrap copper policies has not yet become widespread, and most suppliers indicated that the current benefits for electrolytic copper are limited.

       Looking ahead to tomorrow, it is expected that with additional imports, downstream buyers will still have room for negotiation, and there is a further risk of a decline in spot premiums.