Imported Cargoes Impacted the Market, SHFE Copper Spot Premiums Continued to Decline [SMM Shanghai Spot Copper]

SMM September 8 News:

       Today, spot prices of SMM #1 copper cathode against the SHFE copper 2509 contract were at a premium of 40-220 yuan/mt, with the average premium at 130 yuan/mt, down 35 yuan/mt from the previous trading day. SMM #1 copper cathode prices ranged between 79,740-80,000 yuan/mt. In early trading, SHFE copper fluctuated between 79,700-79,790 yuan/mt before declining to around 79,650 yuan/mt after 10:30 am. The inter-month price spread remained firm near back 50 yuan/mt, showing signs of widening. The import loss for SHFE copper narrowed to 200 yuan/mt.

       Trading sentiment was strong during the day, as a large volume of imported cargo arrived over the weekend, supplemented by some domestic supply. Shanghai inventories increased by 6,600 mt, with more imported cargo still arriving. The procurement sentiment for copper cathode in Shanghai was 3.12, while the sales sentiment stood at 3.20. Transactions for Xiangguang, Lufang, and JCC cargoes dropped from a premium of 80 yuan/mt to around 60 yuan/mt, with limited shipments, as only partial deals were made for long-term contract deliveries. Other brands like Tiefeng, Zhongtiaoshan PC, OLYDA, and Japan and South Korea were initially quoted at a premium of 40-60 yuan/mt but found few takers. The futures price center edged slightly lower amid weak downstream buying interest. During the main trading session, some brands traded at parity to a premium of 20 yuan/mt, dragging down the overall transaction price center. In Changzhou, mainstream deals were concluded at a premium of 20-50 yuan/mt. SX-EW copper weakened to a discount of around 40 yuan/mt during the day, while the arrival of high-quality copper such as CCC-P and ENM pushed the premium center below 200 yuan/mt.

       Looking ahead, with continued imports supplementing supply, such cargoes are unlikely to fetch high prices. A discount is expected tomorrow. However, domestic supply and warrant volumes remain tight, and prices are likely to hold firm above parity ahead of delivery. Watch for guidance from the widening inter-month spread.