Copper Prices Surged but Circulating Supply Decreased, Shanghai Spot Copper Premiums Stabilized [SMM Shanghai Spot Copper]

SMM September 12:

       Today, SMM #1 copper cathode spot prices against the front-month 2509 contract were reported at premiums of 50-120 yuan/mt, with the average premium at 85 yuan/mt, unchanged from the previous trading day. SMM #1 copper cathode prices ranged from 80,610 to 80,900 yuan/mt. In early trading, the SHFE copper 2509 contract briefly pulled back before stabilizing, then surged around 10:00, reaching 80,900 yuan/mt by the end of the first session with only limited and brief transactions. The SHFE copper 2510 contract did not follow suit. Subsequently, the price center pulled back, fluctuating between 80,560 and 80,780 yuan/mt during the morning session. The inter-month price spread fluctuated between 10-30 yuan/mt, while SHFE copper import losses widened to nearly 500 yuan/mt.

       Intraday sales sentiment remained flat, while procurement sentiment improved slightly, mainly due to just-in-time procurement by downstream users ahead of Friday. Procurement sentiment for electrolytic copper in Shanghai was 3.16, and sales sentiment was 3.19.Mainstream parity cargoes were in tight supply, with limited availability after transactions at premiums of 50-80 yuan/mt. Actual transactions in Changzhou ranged from premiums of 10 to 30 yuan/mt, but as futures prices rose, some suppliers offered discounts to parity. Non-registered cargoes saw their price center rise to within a discount of 100 yuan/mt, while registered SX-EW cargoes were at discounts of 50 to 20 yuan/mt.

       Approaching delivery, the open interest of the SHFE copper 2509 contract still does not match warrant levels, and it is expected to continue decreasing on Monday, potentially with intermittent gains. After transitioning to the SHFE copper 2510 contract next week, Shanghai spot copper premiums are expected to stabilize.