Supplement of Both Imported and Domestic Supplies Leads to a Decline in SHFE Copper Spot Premiums [SMM Shanghai Spot Copper]

SMM August 21:

       Today, SMM #1 copper cathode spot prices against the current month 2509 contract were at a premium of 100-220 yuan/mt, with an average quote at a premium of 160 yuan/mt, down 30 yuan/mt from the previous trading day; SMM #1 copper cathode prices ranged from 78,710 to 78,890 yuan/mt. In the morning, SHFE copper 2509 contract fell from 78,700 yuan/mt and then fluctuated rangebound between 78,600-78,680 yuan/mt, closing at 78,640 yuan/mt in the morning. The price spread between futures contracts for the next month narrowed compared to yesterday, fluctuating between BACK 10-30 yuan/mt; the import loss for SHFE copper in the current month widened again by nearly 250 yuan/mt.

       Both buying and selling sentiment improved during the day, with the purchasing sentiment for electrolytic copper in Shanghai at 3.17 and the selling sentiment at 3.18. Due to concentrated arrivals of both imported and domestic supplies, suppliers actively sold off their stocks, leading to a decline in premiums. At the start of the session, mainstream standard-quality copper was quoted at a premium of 120-140 yuan/mt, with deals in Changzhou starting at a premium of 80 yuan/mt. As more offers came in, deals in Changzhou dropped to a premium of 50-70 yuan/mt, while in Shanghai, prices followed suit, falling to a premium of 100-120 yuan/mt. High-quality copper also saw a drop in its center, with deals made at a premium of 180-220 yuan/mt. During the day, EQ A-grade supply was tight, pushing up the transaction center compared to yesterday. Registered SX-EW copper was also in short supply, limiting the extent of the price drop for SX-EW copper. Most suppliers sold OG cargo, with moderate transactions.

       Looking ahead to tomorrow, with continuous domestic inventory inflows and low-priced imports weighing on the market, there is a possibility that the premium for SHFE copper spot will fall further. However, as it is Friday, downstream purchasing sentiment is expected to remain firm, limiting the decline in the premium for SHFE copper spot.