Inventory Increase and Suppliers Actively Shipping Goods, Spot Premiums Decline [SMM South China Spot Copper]

SMM Nov 3:

Today, spot prices of #1 copper cathode in Guangdong against the front-month contract were at a discount of 40 yuan/mt to a premium of 20 yuan/mt, with the average discount at 10 yuan/mt, down 10 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 110 yuan/mt to 70 yuan/mt, with the average discount at 90 yuan/mt, down 10 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 86,935 yuan/mt, down 575 yuan/mt from the previous trading day, while the average price of SX-EW copper was 86,855 yuan/mt, also down 575 yuan/mt.

Spot market: Copper inventories in Guangdong stopped falling and rebounded over the weekend, mainly due to increased arrivals. Although copper prices pulled back today, the inventory increase prompted some suppliers to actively lower prices to expedite shipments, leading to a decline in spot premiums. Today, the procurement sentiment for copper cathode in Guangdong was 1.52, up 0.16 from the previous trading day, while the sales sentiment was 2.36, up 0.27. As of 11:00, high-quality copper against the front-month contract was quoted at a premium of 20 yuan/mt, standard-quality copper at a discount of 40 yuan/mt, and SX-EW copper at a discount of 90 yuan/mt.

Overall, increased inventories prompted suppliers to actively sell, leading to a decline in spot premiums.