Shanghai inventory drops sharply amid pre-holiday stockpiling; spot premiums expected to stay firm [SMM Shanghai Spot Copper]

SMM, September 21:

Today, SMM #1 copper cathode spot prices against the SHFE copper 2610 contract were quoted at premiums of 750-900 yuan/mt, with an average premium of 825 yuan/mt, up 90 yuan/mt from the previous trading day. In early trading, the SHFE copper 2610 contract shot up before consolidating lower. After the open, prices rallied quickly, touching an intraday high near 110,180 yuan/mt, then pulled back rapidly to around 109,940 yuan/mt. Copper prices subsequently rebounded somewhat, consolidating repeatedly around the 110,000 yuan/mt level, before weakening again near midday, with the morning session closing at 109,960 yuan/mt. The backwardation spread between next-month contracts stood at 400-470 yuan/mt, and the import profit margin for SHFE copper against the 2609 contract was at a loss of 1,280-1,130 yuan/mt.

During the day, the selling sentiment for copper cathode in the Shanghai region was 3.45, up 0.14 MoM, while the purchasing sentiment was 3.67, up 0.13 MoM. Historical data can be queried in the database. At the start of early trading, suppliers initially quoted standard-quality copper at premiums of 700-780 yuan/mt. After some low-priced cargoes were quickly traded, suppliers raised their quotes, with Jinchuan ISA, Yuguang, and Tiefeng quoted at premiums of 740-780 yuan/mt. High-quality copper such as Jintun large plates was quoted at a premium of 850 yuan/mt, while non-registered copper such as KIK and TCC was quoted at a premium of 450 yuan/mt, and MOOK, NOR, and others traded at premiums of 570-650 yuan/mt. In the second session, available supply tightened further, and suppliers raised quotes accordingly, with JCC and Lufang trading at a premium of 850 yuan/mt, and Dajiang HS quoted at premiums of 800-830 yuan/mt.

Looking ahead to tomorrow, SMM recorded social inventory in the Shanghai region at 43,900 mt, down 14,700 mt MoM; social inventory in the Jiangsu region stood at 20,600 mt, down 200 mt MoM. Trading performance last Thursday and Friday was relatively strong, with downstream processing enterprises picking up goods normally, while limited inbound cargo replenishment drove a notable decline in Shanghai inventories, keeping available supply in the market persistently tight. Although some imported copper arrived gradually, most of it flowed directly to downstream processing enterprises and did not enter warehouse statistics. Meanwhile, with the Mid-Autumn Festival and National Day holidays approaching, some downstream enterprises began pre-holiday stockpiling, further boosting spot purchasing demand. Overall, supported by low inventory, tight available supply, and pre-holiday restocking demand, spot premiums in the Shanghai region are expected to edge up slightly tomorrow.