Spot Copper Premiums Consolidate and Pull Back Amid Month-End Demand
This week's Shanghai spot copper premiums consolidated and pulled back in the market. The arrival of imported cargoes at ports marginally eased the tightness in available supplies, but prices remained steady due to month-end demand for invoices dated this month. As mid-week approached, the SHFE copper price pullback led to a slight improvement in downstream bargain-hunting inquiries, supporting spot premiums briefly.
However, as copper prices held up well again, downstream purchasing sentiment cooled, and terminal purchase willingness was mostly concentrated at spot premiums below 200 yuan/mt. The psychological price gap between buyers and sellers remained significant, with some demand to cover this-month invoices providing support to prices.
SMM data showed that social inventory in Shanghai decreased by 500 mt from last week, while inventory in Jiangsu also decreased by 500 mt. Although east China destocked slightly, the low absolute inventory remains supportive of premiums.
Looking ahead to next week, with the start of a new procurement cycle, some downstream enterprises have phased restocking needs, and spot procurement volumes may rebound marginally. However, if the futures market stays high, the actual release of procurement volumes will still be limited due to terminals' psychological price level being concentrated at SHFE copper 104,500-104,800 yuan/mt.
On the supply side, earlier imported cargoes have already arrived at ports, and subsequent arrival growth remains to be seen. The backwardation structure for the next-month contract provides support to spot premiums, leading experts to expect that next week's spot copper prices against the SHFE copper 2608 contract will remain at a premium.