This week, SHFE copper spot premiums retreated from highs before stabilizing. The average premium of SMM #1 copper cathode against the SHFE copper 2609 contract fell from 225 yuan/mt at the start of the week to 65 yuan/mt on Friday. High copper prices continued to suppress downstream purchases during the week, and with weak wire and cable orders, spot transactions remained under pressure overall. Against a widening backwardation structure, suppliers showed increased willingness to shift positions and sell, driving premiums steadily lower. On Thursday and Friday, as copper prices pulled back, some processing enterprises concentrated their price fixings, and market purchasing and transactions improved somewhat, but the decline in SHFE copper spot premiums temporarily slowed. On September 10, SMM recorded social inventory in Shanghai at 58,100 mt, up 2,600 mt WoW from last Thursday; social inventory in Jiangsu stood at 18,900 mt, down 4,300 mt WoW from last Thursday.
Looking ahead to next week, the spot market still needs to monitor supply replenishment and quote changes after contract rollover. The import window has rarely opened recently, with import profit margins turning positive, and expectations for subsequent import cargo replenishment have strengthened somewhat. If imported cargoes and smelter arrivals gradually increase, spot supply pressure may become more evident. At the same time, the earlier widening backwardation structure means suppliers still face pressure to shift positions and sell, and spot premium rebound space is expected to be somewhat limited. On the demand side, after copper prices pulled back this week, some processing enterprises showed renewed enthusiasm for price fixings, but this currently reflects more the release of pent-up rigid demand suppressed by high prices, while end-user orders have yet to show clear improvement. Therefore, the sustainability of the purchasing rebound still needs to be observed. Next Tuesday, the SHFE copper 2609 contract enters delivery, and after the rollover, the market will shift to quoting against the 2610 contract. At that time, SHFE copper spot prices against the October contract are expected to show high premiums.
