SHFE Copper Spot Premiums Peak Past 1,000, Then Pull Back
This week, SHFE copper spot premiums rose initially due to tight supply before pulling back as pre-holiday stockpiling cooled. At the start of the week, inventory in the Shanghai region dropped sharply, leaving available supply tight and prompting downstream enterprises to begin stockpiling.
Suppliers responded by raising quotes consecutively, with the average premium of SMM #1 copper cathode against the SHFE copper 2610 contract increasing from 825 yuan/mt on Monday to a high of 1,375 yuan/mt on Tuesday. However, as prices remained high, spot premiums and the backwardation spread between futures contracts also stayed at elevated levels.
This reduced downstream acceptance of high-priced cargoes, causing some suppliers to increase shipments and lower quotes. By Thursday, the average premium had pulled back to 1,315 yuan/mt. Looking ahead to next week, SHFE copper spot prices are expected to remain at a premium but may edge lower due to easing supply tightness.