SHFE Copper Premium Continued to Decline, with Weak Spot Procurement Sentiment During the Day [SMM Shanghai Spot Copper]

SMM September 10 report:

Today, SMM's #1 copper cathode spot prices against the SHFE front-month 2509 contract were quoted at parity to a premium of 120 yuan/mt, with the average premium at 60 yuan/mt, down 30 yuan/mt from the previous trading day. The SMM #1 copper cathode price ranged between 79,670-79,820 yuan/mt. In early morning trading, SHFE copper briefly touched 79,750 yuan/mt before declining, fluctuating within the 79,670-79,700 yuan/mt range. After 11:00 am, it surged to 79,790 yuan/mt and closed at 79,760 yuan/mt. The inter-month spread narrowed to around BACK 10 yuan/mt, while the far-month spread edged up slightly. The import loss for SHFE front-month copper expanded to approximately 250 yuan/mt.

Intraday purchasing sentiment weakened further as imported inventories remained undigested, prompting suppliers to continue offloading at lower prices, leading to a further decline in Shanghai spot copper premiums. The purchasing sentiment index for electrolytic copper in Shanghai stood at 3.12, while the sales sentiment index was 3.22. At market open, most suppliers quoted standard-quality copper at premiums of 20-40 yuan/mt, with Japan and South Korea, Zhongtiaoshan PC, Tiefeng, and Zhongjin at 20 yuan/mt. However, as some suppliers offered at discounts of 30-20 yuan/mt, the transaction center quickly dropped. After the 30 yuan/mt discounted cargoes were absorbed, most market offers stabilized at discounts of 20 yuan/mt to parity, though downstream buyers maintained strong bargaining intentions. Due to persistently declining premiums, downstream buyers were reluctant to increase purchases, expecting further premium drops despite approaching delivery, as imported cargoes remained cheaper. Non-registered brands held firm at around a 100 yuan/mt discount, while registered SX-EW brands were discounted by approximately 50 yuan/mt.

Looking ahead, copper prices are expected to fluctuate rangebound with limited new downstream orders, likely keeping purchasing sentiment subdued. Domestic supplies have not reached the psychological price level for arbitrageurs, and holders of deliverable domestic cargoes show low willingness to sell at lower prices. Tomorrow's transactions are anticipated to remain stagnant, with imported cargoes still trading at slight discounts.