Downstream acceptance of high premiums declined, suppliers' willingness to sell increased, and spot premiums pulled back [SMM Shanghai Spot Copper]

SMM, September 23:

Today, SMM #1 copper cathode spot premiums against the SHFE copper 2610 contract were quoted at a premium of 1,200 yuan/mt to 1,480 yuan/mt, with an average of 1,340 yuan/mt, down 35 yuan/mt from the previous trading day. In early trading, the SHFE copper 2610 contract shot up before plunging sharply. After the open, prices rose quickly, touching a session high near 111,760 yuan/mt, then consolidated at highs. Copper prices subsequently fell rapidly, with the decline widening after breaking below 111,500 yuan/mt, dropping to around 110,880 yuan/mt. After a brief rebound from the low, prices pulled back again, consolidating on a weak note near midday, with the morning session closing at 110,930 yuan/mt. The Back month spread between futures contracts stood at 510-610 yuan/mt, and the import profit margin for SHFE copper against the 2609 contract was between a loss of 1,660 yuan/mt and a loss of 1,540 yuan/mt.

During the day, the selling sentiment for copper cathode in the Shanghai region was 3.71, up 0.06 MoM, while the purchasing sentiment was 3.68, down 0.08 MoM. Historical data can be queried in the database. At the start of early trading, suppliers' initial quotes for Lufang, Zhongjin, Dajiang HS, Xikuang, and others were at a premium of 1,300 yuan/mt. Subsequently, market offers increased, with high-quality copper such as Guixi and Jintun large plates quoted at premiums of 1,450-1,500 yuan/mt, Lufang, Xiangguang, and JCC quoted at premiums of 1,340-1,380 yuan/mt, and non-registered copper such as NOR and APC quoted at premiums of 900-1,080 yuan/mt. Entering the second session, market activity cooled somewhat, and suppliers lowered their quotes to facilitate transactions, with Tiefeng and others quoted at a premium of 1,200 yuan/mt.

Looking ahead to tomorrow, available supply in the Shanghai region remains tight. Although some imported copper has been arriving gradually during the day, the actual replenishment volume is still relatively limited, and the downward pressure on spot premiums is expected to remain limited in the short term. However, with spot premiums staying high, downstream processing enterprises' acceptance of current prices continues to decline, and wait-and-see sentiment in the market has been rising, with purchases gradually shifting toward essential demand only. Meanwhile, with premiums at elevated levels, suppliers' willingness to sell has strengthened compared with earlier, and some cargoes previously registered as warrants have begun to flow into the spot market, though the overall release volume remains limited. On balance, tight supply still provides some support for premiums, but negative feedback from the demand side on high premiums is gradually emerging, and spot premiums in the Shanghai region are expected to pull back tomorrow.