Copper Prices Retreat from Highs but Consumption Recovery Remains Unclear, Spot Premiums Show Weakness [SMM Southern China Copper Cathode Spot Weekly Review]

SMM November 6:
Guangdong Region: This week, spot premiums in the region fluctuated at lows. Although both inventory and copper prices declined WoW, end-user restocking demand remained sluggish, preventing a significant rebound in premiums. As of Thursday, high-quality copper was quoted at a premium of 10 yuan/mt, down 20 yuan/mt WoW; standard-quality copper was quoted at a discount of 40 yuan/mt, down 10 yuan/mt WoW; and SX-EW copper was quoted at a discount of 90 yuan/mt, down 10 yuan/mt WoW. On Thursday, the price spread for standard-quality copper between Shanghai and Guangdong was at parity (0 yuan/mt), leaving no room for arbitrage between regions. According to SMM statistics, total warehouse inventory in Guangdong as of Thursday was 19,300 mt, down 80 mt WoW, with warrants totaling 8,000 mt, down 800 mt WoW. Specifically, weekly warehouse arrivals this week were 11,700 mt, up 3,000 mt WoW but below the annual average (14,000 mt/week), as arrivals of both imported copper and domestic copper were low. Weekly warehouse withdrawals were 11,700 mt, up 200 mt WoW but below the annual average (14,200 mt/week). Although copper prices pulled back, downstream wait-and-see sentiment did not improve significantly, and restocking demand remained low.

Looking ahead to next week, imported copper arrivals are expected to remain low, while domestic copper arrivals will also be limited due to maintenance and production cuts. On downstream consumption: unless copper prices fall below 85,000 yuan/mt, orders are unlikely to increase substantially. Therefore, we expect a scenario of weak supply and demand next week, with weekly inventory likely to edge down and spot premiums possibly rising slightly.

(The above information is based on market data collection and comprehensive assessment by the SMM research team. The information provided herein is for reference only. This article does not constitute direct investment research advice. Clients should make decisions cautiously and not use this to replace independent judgment. Any decisions made by clients are unrelated to SMM.)