Month-end supply reduction led to a slight increase in premiums; attention on next week's arrivals [SMM South China Copper Cathode Spot Weekly Review]

August 28, 2025

Guangdong region: This week, the premiums and discounts in this region showed a trend of increasing slightly, as the relatively small arrivals led to a continuous decline in inventory. By Thursday, high-quality copper was quoted at a premium of 90 yuan/mt, unchanged from last Thursday, standard-quality copper was quoted at a premium of 40 yuan/mt, increasing slightly by 10 yuan/mt WoW, and SX-EW copper was quoted at a discount of 30 yuan/mt, unchanged from last Thursday. On Thursday, the price spread of standard-quality copper premiums and discounts between Shanghai and Guangdong was 90 yuan/mt higher in Shanghai, with a relatively small price difference, leaving no room for inter-regional cargo transfers. According to SMM statistics, as of Thursday, the total inventory in Guangdong warehouses was 23,500 mt, a decrease of 3,000 mt WoW, and the total warrants amounted to 11,700 mt, a decline of 2,600 mt WoW. Specifically: This week, warehouse arrivals were 10,200 mt/week, a decrease of 1,000 mt/week WoW, significantly lower than the annual average (14,000 mt/week). Although the arrivals of imported copper increased this week, the arrivals of domestic copper decreased, resulting in an overall reduction in supply. Outflows from warehouses were 14,300 mt/week, an increase of 2,300 mt/week WoW, basically flat with the annual average (14,200 mt/week). Copper prices jumped initially and then pulled back, leading to a slight increase in downstream procurement enthusiasm WoW.

Looking ahead to next week, the arrivals of domestic copper are expected to increase slightly, while the arrivals of imported copper are projected to decrease compared to this week, resulting in a slightly higher total supply than this week. In terms of downstream consumption, with ample funds for downstream enterprises at the beginning of the month and a pullback in copper prices, consumption is expected to increase next week compared to this week. Therefore, we believe that next week will see a simultaneous increase in both supply and demand, with a slight increase in weekly inventory expected, and spot premiums are anticipated to remain at low levels.

(The above information is based on market collection and comprehensive assessment by the Shanghai Metals Market research team. The information provided herein is for reference only. This article does not constitute direct advice for investment research decisions. Clients should exercise caution in decision-making and not rely solely on this information as a substitute for independent judgment. Any decisions made by clients are unrelated to Shanghai Metals Market.)