Deliverable Cargoes Are Scarce and Hard to Find, with Quotes Showing Significant Price Spread Divergence in the Early Market [SMM SHFE Spot Copper]

SMM, January 3:

Today, spot premiums for #1 copper cathode against the SHFE 2501 contract were quoted at 50-120 yuan/mt, with an average of 85 yuan/mt, down 10 yuan/mt from the previous trading day. Standard-quality copper traded at 73,110-73,380 yuan/mt, while high-quality copper traded at 73,160-73,420 yuan/mt. The SHFE copper 2501 contract opened lower last night and briefly broke below 73,000 yuan/mt, with the center slightly recovering during the morning session. During intraday trading, it tested 73,330 yuan/mt, fluctuating overall above 73,000 yuan/mt. The price spread between the SHFE copper 2501 and 2502 contracts ranged from a contango of 20 yuan/mt to a backwardation of 20 yuan/mt.

Spot premiums in the early morning session showed significant differences, with tight supply and high prices for deliverable cargoes. At the beginning of trading, mainstream standard-quality copper was quoted at premiums of 60-80 yuan/mt, while high-quality copper, such as CCC-P and Jinchuan (plate), was quoted at premiums of 100-140 yuan/mt with limited transactions. Suppliers were reluctant to sell deliverable cargoes, leading to a widened price spread between imported copper and high-quality copper. During the main trading session, mainstream standard-quality copper traded at premiums of 50-70 yuan/mt, while high-quality copper traded at premiums of 110-120 yuan/mt with some transactions. Hydro copper, such as met, traded at a discount of 50 yuan/mt with limited transactions. By 11:00 a.m., market quotations gradually stabilized.

Recently, copper prices pulled back, but end-use demand did not show significant growth. This was mainly due to seasonal factors causing short-term demand weakness. The import volume of overseas copper cathode in January is expected to remain flat compared to December, and spot premiums in east China are expected to face significant resistance on the upside.