Downstream wait-and-see sentiment is strong, SHFE copper premium under pressure at high levels [SMM Shanghai spot copper]

SMM, September 15:

Today, SMM #1 copper cathode spot prices against the SHFE copper 2609 contract were quoted at a discount of 100 yuan/mt to a premium of 250 yuan/mt, with an average premium of 75 yuan/mt, up 85 yuan/mt from the previous trading day. In early trading, the SHFE copper 2609 contract mostly traded between 107,390 yuan/mt and 107,770 yuan/mt, while the SHFE copper 2610 contract mostly traded between 106,670 yuan/mt and 107,320 yuan/mt. The backwardation spread between the two front-month contracts narrowed from a high of 910 yuan/mt to around 420 yuan/mt. The import profit margin for SHFE copper against the 2609 contract stood at a profit of 970-1,370 yuan/mt.

During the day, the selling sentiment for copper cathode in the Shanghai region was 2.75, down 0.86 WoW, while the buying sentiment was 2.48, down 0.09 WoW. Historical data can be queried in the database. At the start of the morning session, suppliers initially quoted standard-quality copper at premiums of 750-780 yuan/mt against the 2610 contract, then slightly lowered quotes to premiums of 680-750 yuan/mt. Non-registered copper was lowered from premiums of 350-380 yuan/mt to 300-350 yuan/mt. High-quality copper such as Jinchuan plate and Jintun plate was quoted at premiums of 800-810 yuan/mt. In the second trading period, suppliers' willingness to sell diverged, with some holding back and waiting, while others slightly lowered quotes to a premium of 600 yuan/mt. High-quality copper was mostly quoted at a premium of around 780 yuan/mt.

Looking ahead to tomorrow, as some imported cargoes gradually arrive at ports, available supply in the Shanghai market has been somewhat replenished compared with earlier, exerting some pressure on spot premiums. On the demand side, although SHFE copper prices pulled back during last night's night session, SMM understands that actual end-use procurement volumes remain relatively limited. Downstream buyers overall maintain a strong wait-and-see sentiment, with purchases still driven mainly by rigid demand, and acceptance of current high-premium cargoes remains low. Meanwhile, as market pricing gradually shifts to the 2610 contract, spot premiums against the 2610 contract remain at relatively high levels. Some suppliers are willing to lower quotes, but their willingness to sell at low prices is equally limited. Overall, with increased import arrivals and weak end-use demand, the center of spot copper quotes against the 2610 contract is expected to edge lower tomorrow. However, given that available supply has not yet loosened significantly and suppliers still intend to hold prices firm, spot premiums are expected to remain at relatively high levels.