[SMM Shanghai Spot Copper] Looking ahead to next week, next Monday will be the last trading day for the SHFE copper 2608 contract, and the backwardation spread between the 2608 and 2609 contracts remains at a high level of 590-700 yuan/mt. Under SMM methodology, SMM always quotes against the front-month contract, and spot prices against the 2608 contract are still expected to show relatively deep discounts on Monday. As the pricing basis switches to the 2609 contract on Tuesday, spot premiums and discounts will show a notable apparent recovery. Delivery side, as of the morning close, open interest in the SHFE copper 2608 contract was still about 9,480 lots; as of August 13, SHFE registered copper warrants stood at 27,200 mt. Some suppliers continued to register eligible material as warrants, and material will remain partly split between the spot and warrant sides. Demand side, some downstream enterprises have seen a recovery in operating rates, and end-user clients mostly price against the 2609 contract; their acceptable copper price center has moved up from previous levels, and their bids are mostly concentrated near 107,000 yuan/mt. However, this price level is still some distance away from current futures prices, and actual demand release is expected to remain largely need-based. Overall, Shanghai spot copper prices against the SHFE copper 2608 contract next Monday are expected to remain at deep discounts, and spot prices against the 2609 contract will rebound noticeably after the contract rollover; downstream trading and the flow of deliverable material still need to be monitored going forward.

[SMM Shanghai spot copper] Looking ahead to tomorrow, as delivery approaches and the inter-month backwardation spread widens further, the cost of rolling over positions for some suppliers has risen noticeably, boosting their willingness to sell spot cargoes, which has pushed mainstream standard-quality copper quotes quickly down to a discount range. Meanwhile, against the relatively strong front-month contract price, some deliverable material is being shifted to warrants, leading to a divergence in spot cargo flows. As of August 11, SHFE copper registered warrants stood at approximately 23,200 mt; as of the morning close on August 12, open interest in the SHFE copper 2608 contract remained around 23,000 lots. The pace of open interest pullback and warrant changes ahead of delivery still warrants close attention. On the demand side, end-use consumption remains sluggish, with downstream purchases still largely need-based, and low-priced non-registered copper trading relatively actively on price advantage but not yet driving a noticeable improvement in overall procurement. Taken together, with the widening backwardation spread, increased willingness to sell among suppliers, and weak end-use demand, spot copper prices against the SHFE 2608 contract are expected to remain under pressure tomorrow, and the spot is likely to stay at a discount.

SMM Morning Meeting Minutes: Last Friday night, LME copper opened at $14,141/mt. At the beginning of the session, it swung wildly and hit a high of $14,173/mt. Then the center of copper prices shifted straight downward, dipping to $14,006/mt near the end of the session, and finally settled at $14,022/mt, down 0.5%. Trading volume reached 19,800 lots, and open interest stood at 258,000 lots, up 3,254 lots from the previous trading day, indicating an increase by bears. Last Friday night, the most-traded SHFE copper 2609 contract opened at 108,010 yuan/mt. It immediately rose to 108,140 yuan/mt at the beginning, then the center of copper prices consolidated lower, dipping to 107,130 yuan/mt near the end, and finally settled at 107,160 yuan/mt, down 0.8%. Trading volume reached 45,000 lots, and open interest stood at 215,000 lots, down 6,056 lots from the previous trading day, indicating a reduction by bulls.

[SMM Shanghai Spot Copper] Looking ahead to next week, with delivery approaching, Shanghai spot copper prices continue to rise, and the backwardation spread between nearby and next-month contracts shows signs of further widening. Some suppliers face the need to roll positions, which may drive an increase in low-priced available cargoes, exerting some pressure on spot premiums. Intraday, ahead of the weekend, some downstream buyers made just-in-time procurement, while some enterprises had demand for invoices. Market transactions improved from yesterday, and although suppliers still lowered their offers, the overall price reduction was limited. Supply side, currently available cargoes have not become significantly looser, and the circulation of some brands is limited, providing some support to the downside of premiums. Overall, against the backdrop of position rolling pressure near delivery, widening price spreads between futures contracts, and just-in-time procurement by downstream buyers, Shanghai spot copper prices against the SHFE 2608 contract are expected to trade at a discount next week. The discount magnitude will depend on the movement of the spread and the flow of market supply.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, today the SHFE copper price center rose further above 107,000 yuan/mt. High copper prices significantly dampened downstream purchases, and the market was still dominated by rigid demand buying. However, suppliers’ willingness to sell strengthened, and they continuously lowered their offers throughout the day to facilitate deals. As standard-quality copper prices pulled back, downstream purchase willingness improved, and some low-priced cargoes were traded gradually. Meanwhile, available cargoes of high-quality copper and registered SX-EW copper remained scarce, with relatively firm offers providing some support to spot premiums. Overall, against the backdrop of high copper prices suppressing demand and active price cuts by suppliers to sell, Shanghai spot copper prices against the SHFE 2608 contract are expected to remain at a premium tomorrow. The overall center may continue to be in the doldrums, but improved transactions at low prices may limit the extent of further pullbacks in premiums.

[SMM Shanghai Spot Copper] Looking ahead to next week, as a new round of procurement cycle begins at the start of the month, restocking demand from some downstream buyers and traders may be released, providing some support for spot premiums. After low-priced cargoes were gradually traded during the day, suppliers' willingness to hold prices firm increased notably. Quotes for standard-quality copper with invoices dated next month were basically maintained at a premium of 200 yuan/mt or higher, with limited willingness to sell at much lower prices. However, with copper prices still at elevated levels, the actual growth in downstream purchases remains to be seen, and the gradual arrivals of imported copper may also supplement spot supply. Overall, supported by the release of procurement demand at the start of the month and suppliers' efforts to hold prices firm, Shanghai spot copper prices against the 2608 contract are expected to remain at a premium next week. The overall center may stop falling and rebound, while attention needs to be paid to the volume of imported arrivals and their actual impact on supplementing market supply.

This week, the center of Shanghai spot copper premiums consolidated and pulled back. At the start of the week, imported cargoes arrived successively at ports, marginally easing the previous tightness in available supplies. Meanwhile, as month-end approached, the price spread between cargoes with invoices dated this month and next month widened, with some demand to cover this-month invoices providing some support to prices. Mid-week, the pullback in SHFE copper prices led to a slight improvement in downstream bargain-hunting inquiries, and together with month-end invoice demand, spot premiums briefly stabilized. Subsequently, copper prices held up well again, downstream purchasing sentiment cooled, and terminal purchase willingness was mostly concentrated at spot premiums below 200 yuan/mt, with a notable psychological price gap between buyers and sellers. In terms of inventory, SMM data showed that social inventory in Shanghai was 69,500 mt, down 500 mt from this Monday; inventory in Jiangsu was 21,200 mt, down 500 mt from this Monday. Inventory in east China destocked slightly, still providing some support to premiums. Looking ahead to next week, with the start of a new procurement cycle, the sluggish trading at month-end may improve. Some downstream enterprises have phased restocking needs, and spot procurement volumes may rebound marginally. However, SMM understands that the current psychological price level for terminals is mainly concentrated at SHFE copper 104,500–104,800 yuan/mt. If the futures market stays high, the actual release of procurement volumes will still be limited. On the supply side, earlier imported cargoes have already arrived at ports, and the subsequent arrival growth remains to be seen. Meanwhile, absolute inventory in east China remains low, and combined with the backwardation structure for the next-month contract, this provides support to spot premiums. Overall, it is expected that next week, spot copper prices against the SHFE copper 2608 contract will remain at a premium, and the center of premiums may stop falling and stabilize. If copper prices pull back to around downstream psychological levels, improved spot transactions could push premiums slightly higher.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, SHFE copper prices pulled back during the day, triggering a slight release of dip-buying inquiries and purchases from some downstream consumers. Buying sentiment in the Shanghai region improved from the previous trading day. However, according to SMM, current end-user orders are still mostly concentrated around 104,500 yuan/mt, and transaction prices for spot cargoes remain some distance away from downstream psychological price levels, leaving actual demand growth relatively limited. With month-end approaching, some buyers still need to restock cargoes with invoices dated this month. Supply of such cargoes is relatively tight, providing some support for their quotes. In comparison, the market for cargoes with invoices dated next month is more abundant, and suppliers show a strong willingness to sell. The price spread between current-month and next-month invoice cargoes is expected to persist. Overall, against the backdrop of copper price pullback driving dip-buying, demand for current-month invoice cargoes providing support, but only limited improvement in end-use consumption, Shanghai spot copper prices against the 2608 contract are expected to remain at a premium tomorrow, with the overall center likely to move sideways around the current level.

[SMM Shanghai spot copper] Looking ahead to tomorrow, approaching month-end, suppliers are gradually starting to quote for cargoes with invoices dated next month, with the divergence in invoice structures widening the price spread between this-month and next-month invoice cargoes. Some buyers need to restock cargoes with invoices dated this month, making such cargoes relatively tight. End-use consumption side, copper prices stay high, downstream purchase willingness remains sluggish, and intraday end-user transactions were sluggish. Suppliers only secured limited transactions after continuously lowering quotes, reflecting that current high copper prices are still significantly suppressing demand. According to SMM, affected by the accumulation of finished product inventories, some downstream processing enterprises further slowed their procurement pace. Supply side, the intraday spot market saw some imported cargoes circulating, including brands such as Peruvian large plates, ESOX, and Myanmar. Import arrivals at ports are supplementing spot supply, marginally easing the previously tight availability of spot cargoes. SMM recorded social inventory in Shanghai at 70,000 mt, up 1,700 mt WoW from last Thursday, and in Jiangsu at 21,700 mt, down 300 mt WoW. Overall, considering the combined impact of import arrivals, weak consumption, and month-end invoice differentiation, spot copper against the SHFE copper 2608 contract is expected to stay at a premium tomorrow.

[SMM Shanghai Spot Copper] Looking ahead to next week, the current tight supply of available spot cargoes remains unchanged. After low-priced sources were quickly absorbed intraday, suppliers' willingness to hold prices firm re-emerged, with the premium rebounding to around 300 yuan/mt, indicating strong support from below. According to SMM, after a slight correction in SHFE copper prices, end-use demand emerged, and orders for some copper processing enterprises increased, with end-users mostly placing orders around 104,500 yuan/mt. In terms of supply, some LME cancelled warrants have already been shipped to China and are expected to arrive gradually around next week; the actual supply remains to be observed. Overall, with low inventory, support from the backwardation structure, and downstream dip-buying, Shanghai spot copper prices against the SHFE 2608 contract are expected to maintain a premium next week, though the overall center may edge down slightly. Attention should be paid to the actual impact of import arrival pace on spot circulation.