Morning Premiums Declined with Weak Demand on the Spot SHFE Copper Market【SMM SHFE Spot Copper】

SMM News, December 27:

Today, spot #1 copper cathode was quoted at a discount of 70 yuan/mt to a premium of 10 yuan/mt against the SHFE 2501 contract, with an average price at a discount of 30 yuan/mt, down 55 yuan/mt from the previous trading day. Standard-quality copper traded at 74,130-74,300 yuan/mt, while high-quality copper traded at 74,160-74,350 yuan/mt. The SHFE copper 2501 contract opened higher overnight but declined after the morning opening, consolidating around 74,300 yuan/mt and testing 74,180 yuan/mt during the session. In the second trading period, it jumped initially and then pulled back, returning to 74,200 yuan/mt before the morning session ended. The price spread between the SHFE copper 2501 and 2502 contracts fluctuated from a contango of 30 yuan/mt to a backwardation of 10 yuan/mt.

Spot premiums dropped significantly in the early morning session as year-end cash flow pressures became evident, prompting many traders to sell at low prices. At the beginning of the session, mainstream standard-quality copper with invoices dated next month was quoted at a discount of 20 yuan/mt to parity, while high-quality copper such as CCC-P and Jinchuan (plate) was quoted at a premium of 10-20 yuan/mt with next-month invoices. Offers for imported cargoes remained low, and some suppliers began selling at lower prices. During the main trading period, mainstream standard-quality copper prices quickly declined, with next-month invoices quoted at a discount of 40-20 yuan/mt and limited transactions, while high-quality copper with next-month invoices was quoted at a discount of 20 yuan/mt to a premium of 20 yuan/mt with some transactions. As buyer demand remained weak, premiums continued to decline. Mainstream standard-quality copper with next-month invoices was quoted at a discount of 60-40 yuan/mt, while high-quality copper was quoted at a discount of 20-10 yuan/mt with some transactions. By 11 a.m., transaction prices in the market continued to fall, and spot premiums plummeted.

As the year-end approaches, many companies opted to reduce inventory holdings to avoid capital occupation, and market demand weakened after the execution of long-term contracts by traders. Without support, spot premiums plunged during the morning session. However, overall market inventory remained low, and if there is no significant inventory buildup over the weekend, premiums are expected to recover after entering 2025.