Shandong Copper Cathode Premiums Soar on Tight Supply and Recovering Demand

Copper prices saw a pullback this week in China's Shandong province, but demand is slowly warming up. The premium for spot copper cathode returned to high levels after a delivery contract rollover was completed on Thursday.

The average spot premium stood at 420 yuan/mt as of Thursday, marking a return to a backwardation structure. This pullback in prices boosted downstream demand, which combined with tight spot supply, gave suppliers the support they needed to hold firm and keep spot quotes high.

Looking ahead, while demand is yet to show clear signs of picking up, social inventory levels for copper cathode are currently at a low single-digit level. This limited stock is expected to continue supporting the spot market and preventing premiums from pulling back significantly.