Early Market Trading Volume Declined Overall, Demand Weakened but Transaction Center Held Steady [SMM Yangshan Spot Copper]

【SMM Copper Inventory Update】Social inventory of copper cathode in major regions across China declined for the seventh consecutive week. Arrivals of imported copper remained generally stable, while domestic supply continued to be tight with lower arrivals. Downstream rigid demand was steadily released, and combined with concentrated stockpiling ahead of the Labour Day holiday that boosted demand and marginal recovery in consumption, the pace of warehouse withdrawals remained stable, further driving the continued downward trend in nationwide copper inventories.

From the invoice structure perspective, the current tight supply of cargoes with invoices dated this month in the Shanghai spot copper market showed no signs of easing. Suppliers generally raised their quotes for cargoes with invoices dated this month, and low-priced sources were hard to find. Some downstream enterprises, to ensure the issuance of invoices for the current month, preferred to purchase directly from smelters, diverting some spot demand away from the trading market. From the supplier behavior perspective, with month-end settlement approaching, some suppliers showed low enthusiasm for shipments and held back from selling, further tightening available sources in circulation. Demand side, the Labour Day holiday falls next week, and downstream enterprises have pre-holiday stockpiling demand. Procurement may see some increase, with the preference for cargoes with invoices dated this month set to intensify the structural tightness in the spot market. Overall, under the combined effects of invoice shortages, suppliers holding back from selling, and pre-holiday stockpiling, spot prices against the SHFE copper 2605 contract are expected to maintain a premium tomorrow, continuing the overall firm trend.