Shanghai Spot Premiums Surge Amid Tight Supply Conditions

The Shanghai spot market for copper cathode has been experiencing tight supply conditions, causing premiums to rise. According to SMM, available cargo in the market is relatively scarce, leading suppliers to hold back from selling and maintain firm prices. The center of Shanghai spot premiums moved higher, with spot prices against the SHFE copper 2609 contract remaining at a premium.

The recent port congestion has affected the pace of arrivals and warehousing for some imported copper, limiting replenishment in China's spot market. Additionally, as the export window for copper opened, some market participants became more willing to export, diverting available cargo in China. This has further reinforced expectations of tight spot supply.

Despite elevated absolute levels of copper prices, the premium is expected to continue rising, albeit with limited upside. SMM assessed Shanghai spot #1 copper cathode prices against the SHFE copper 2609 contract at a premium of 180-320 yuan/mt, with an average premium of 250 yuan/mt, up 40 yuan/mt from the previous trading day.