Copper Prices Suppress Demand Amid Elevated Backwardation Structure

Copper prices have led to suppressed consumption demand, causing market caution. The London Metal Exchange (LME) nearby backwardation structure remains elevated due to ongoing port congestion. Additionally, copper cathode inventories in China and abroad are low, with suppliers unwilling to sell at low prices, resulting in a stalemate between buyers and sellers.

According to the SMM Yangshan spot copper data, on September 1, the average warrant price fell by $3/mt from the previous trading day to $72/mt. The average B/L price remained flat at $70/mt, while the EQ copper (CIF B/L) price also stayed unchanged at $30/mt.

Mainstream quotations for September registered warrants were heard to be around $65-70/mt, and for September-arrival EQ copper, they were approximately $55/mt. Traders have opted to observe and execute long-term contracts under the current SHFE/LME price ratio and structure, leaving the spot market sluggish.