Copper Prices Surged with Downstream Purchases Cautious, Spot Premiums Declined Significantly [SMM Southern China Copper Cathode Spot Weekly Review]

SMM December 4 News:

Guangdong Region: Premiums and discounts in the region trended lower with fluctuations this week. As copper prices rose significantly, downstream enterprises' purchasing desire declined, and suppliers had to lower prices to facilitate shipments. As of Thursday, high-quality copper was quoted at a premium of 120 yuan/mt, down 40 yuan/mt WoW; standard-quality copper was quoted at a premium of 30 yuan/mt, down 50 yuan/mt WoW; SX-EW copper was quoted at a discount of 40 yuan/mt, down 50 yuan/mt WoW. On Thursday, the price spread for standard-quality copper premiums and discounts between Shanghai and Guangdong was 30 yuan/mt higher in Shanghai, a relatively small difference that left no room for cross-regional transfers. According to SMM statistics, as of Thursday, total warehouse inventory in Guangdong was 13,400 mt, down 172 mt WoW, with warrants totaling 4,100 mt, down 1,549 mt WoW. Specifically: warehouse arrivals this week were 9,900 mt/week, down 751 mt/week WoW, significantly below the annual average (14,000 mt/week), with declines in arrivals for both imported copper and domestic copper. Warehouse withdrawals were 10,200 mt/week, down 4,300 mt/week WoW, far below the annual average (14,200 mt/week); after the sharp rise in copper prices, downstream purchasing desire was low, leading to a noticeable decrease in withdrawals.

Looking ahead to next week, arrivals for both imported and domestic copper are not expected to increase significantly. In terms of downstream consumption: after the copper price surge, enterprise purchasing enthusiasm has already declined, and this situation is expected to persist into next week. Therefore, we believe next week will see a scenario of weak supply and demand, with weekly inventory expected to increase slightly and spot premiums likely to continue declining.

(The above information is based on market 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.)