Rising copper prices curb procurement, Shanghai spot copper premiums pull back under pressure [SMM Shanghai Spot Copper]

SMM Aug 4 news:

Today, SMM #1 copper cathode spot against the current month 2608 contract was quoted at premiums of 230-330 yuan/mt, averaging a premium of 280 yuan/mt, up 20 yuan/mt from the previous trading day. The SHFE copper 2608 contract rose overall in early trading, with a slight correction after a rapid surge. It opened at 106,200 yuan/mt, then moved higher, reaching a high of 106,830 yuan/mt before dipping slightly to 106,510 yuan/mt, then continued to rise, closing at 106,700 yuan/mt. The inter-month backwardation spread was between 100 and 170 yuan/mt, and the import profit margin for SHFE copper against the 2608 contract ranged from a loss of 840 yuan/mt to a loss of 730 yuan/mt.

Today, sales sentiment for copper cathode in Shanghai was 3.00, basically flat, while purchasing sentiment was 2.91, up 0.04 from the previous trading day. Historical data can be queried in the database. At the start of early trading, suppliers first offered standard-quality copper at premiums of 220-280 yuan/mt, with brands such as Dajiang PC, Tiefeng, Jinfeng, and Yuguang quoting premiums of 220-250 yuan/mt. Subsequently, suppliers lowered offers, with Tiefeng, Zijin, Zhongtiaoshan, and Yuguang quoting premiums of 200-220 yuan/mt. High-quality copper was scarce, with only some Jintun large plates circulating, quoted at a premium of 300 yuan/mt. In the second session, some suppliers continued to cut offers, with Tiefeng and Jinfeng traded at premiums of 180-190 yuan/mt, and JCC and Lufang traded at premiums of 220-240 yuan/mt. Non-registered copper was largely traded at a premium of around 50 yuan/mt.

Looking ahead to tomorrow, the SHFE copper price center having moved above 106,500 yuan/mt is expected to significantly suppress downstream purchases. Although the beginning-of-month restocking cycle still sees some downstream buyers needing to restock, and purchasing sentiment rebounded slightly from the previous trading day, actual purchases remained cautious, with deals only concluded after suppliers cut offers. Meanwhile, cheap non-registered copper traded at a premium of around 50 yuan/mt, widening the price spread with registered standard-quality copper and further weighing on standard-quality copper premiums. The inter-month backwardation structure has narrowed from earlier levels, weakening the basis for suppliers to hold prices firm. Overall, under the combined impact of high copper prices suppressing downstream purchases, cheaper materials flooding the market, and increased willingness to sell, SHFE copper spot premiums against the 2608 contract are expected to remain tomorrow, but the overall center may decline slightly.