SMM, November 4:
Today, SMM #1 copper cathode spot prices against the SHFE copper 2611 contract were quoted at premiums of 1,700-2,100 yuan/mt, with an average premium of 1,900 yuan/mt, up 600 yuan/mt from the previous trading day. In early trading, the SHFE copper 2611 contract opened lower and quickly fell, then retreated after a rapid rise. After the open, prices quickly dropped from around 107,650 yuan/mt to near 107,080 yuan/mt, then rebounded to around 107,650 yuan/mt. Thereafter, copper prices lacked upward momentum, and futures drifted lower, with several small rebounds during the session that failed to sustain, as the price center gradually shifted downward. Near midday, prices fell again, hitting a low of around 107,050 yuan/mt, and closed the morning session at 107,060 yuan/mt. The backwardation spread between adjacent months was between 1,180 yuan/mt and 1,760 yuan/mt, and the import profit margin for SHFE copper against the 2611 contract was between a loss of 720 yuan/mt and a loss of 480 yuan/mt.
Intraday, sales sentiment for copper cathode in the Shanghai region was 3.16, up 0.46 MoM, while procurement sentiment was 2.61, down 0.06 MoM. Historical data can be queried in the database. At the start of early trading, suppliers quoted standard-quality copper at a premium of 1,900 yuan/mt, and non-registered copper such as BMS and CLM at premiums of 1,000-1,100 yuan/mt, which sold out instantly. Subsequently, suppliers showed strong willingness to hold prices firm, and prices only edged down slightly. Registered SX-EW copper BMKMOOK was quoted at a premium of 1,800 yuan/mt, while high-quality copper JNMC, Guixi, and Jintun large plates were quoted at premiums of 2,500-3,000 yuan/mt. In the second session, suppliers slightly lowered their quotes, with some standard-quality copper quoted at premiums of 1,700-1,800 yuan/mt. Low-priced cargoes sold out quickly, non-registered copper became hard to find in the market, and high-quality copper JNMC, Guixi, and Jintun large plates were quoted at premiums of 1,900-2,200 yuan/mt.
Looking ahead to tomorrow, available supply in the Shanghai spot market remains increasingly tight. After SHFE copper prices pulled back notably intraday, suppliers sharply raised their quotes, driving spot premiums significantly higher to a new high for the year. Demand side, although the pullback in copper prices provided some boost to downstream procurement, spot premiums and the backwardation spread between adjacent months both remain high, keeping comprehensive procurement costs for downstream processing enterprises elevated and exerting strong pressure on end-use consumption. According to SMM, some downstream processing enterprises have begun considering measures such as furnace shutdowns and heat preservation to reduce raw material consumption due to excessive procurement costs, and negative feedback from high premiums is gradually emerging in the market. Supply side, the arrival and unloading pace of imported copper vessels has been affected to some extent, and near-term supply replenishment from imports remains uncertain. Overall, available supply in the market remains tight, providing strong support for spot premiums. Shanghai spot premiums are expected to stay high tomorrow, but with both spot premiums and the backwardation spread between adjacent months having risen sharply, downstream affordability has clearly weakened. Caution is warranted over further pressure on actual consumption from high premiums and high backwardation, as well as the risk of premium pullback if market transactions weaken going forward.
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