Spot copper supply continues to tighten, pushing premiums higher; supply-demand weakness and mediocre trading [SMM Shandong Copper Cathode Spot Weekly Review]

This week, spot premiums in Shandong continued to rise. As of Thursday, the average spot copper price in Shandong was at a premium of 50 yuan/mt. The market maintained a supply-demand weakness pattern this week. Two smelters in the province underwent simultaneous maintenance, regional circulation of spot cargoes was already tightening, social inventory of copper cathode kept destocking, and spot circulation tightened, providing strong support to spot quotations. In the Shanghai market, typhoon expectations disrupted logistics and production, prompting downstream users in Jiangsu and Zhejiang to stockpile intensively ahead of time, driving up spot premiums in Shanghai. The increase in external purchase demand led to large shipments of Shandong cargoes to other provinces, further tightening local circulation. On the other hand, end-users in the province were in the off-season, with weak procurement demand. However, suppliers held back from selling and were unwilling to offer discounts to sell at low prices. Quotations in the market diverged significantly, and the price spread between high and low quotes widened, with overall trading mediocre. Looking ahead to next week, social inventory is expected to remain low, and the tightness in spot supply is unlikely to ease in the short term. Shandong premiums are expected to fluctuate in tandem with Shanghai futures, lacking drivers for a significant pullback.