Copper Prices Fell as Supply and Demand Both Strengthened; SHFE Copper Spot Discounts Stabilized at Current Levels [SMM Shanghai Spot Copper]

SMM, March 20:

In the morning session, the SHFE copper 2604 contract rose and then pulled back before fluctuating rangebound. It opened at 95,300 yuan/mt, climbed after the open to a high of 96,230 yuan/mt, then pulled back and fluctuated between 95,500 yuan/mt and 95,900 yuan/mt, with the closing price at 95,850 yuan/mt. The Contango price spread between futures contracts for adjacent months ranged from 50 yuan/mt to 0 yuan/mt, while the import profit margin for the front-month SHFE copper contract ranged from a profit of 130 yuan/mt to a profit of 260 yuan/mt.

Intraday, sales sentiment for copper cathode in Shanghai was 2.82, down 0.2 MoM, while purchasing sentiment was 2.8, down 0.14 MoM. . At the start of morning trading, suppliers quoted standard-quality copper at discounts of 90 yuan/mt to parity, with JCC, Lufang, Xiangguang and others quoted at discounts of 50 yuan/mt to 30 yuan/mt; Zhongjin, Tiefeng, Zijin, OLYDA and others quoted at discounts of 80 yuan/mt to 60 yuan/mt; Jinguan, Jinxin, Jinfeng, Jintun PC and others quoted ex-works at discounts of 20 yuan/mt to parity. High-quality copper such as Guixi, Jinchuan (plate), and Jintun plate was quoted at discounts of 10 yuan/mt to parity. Entering the second trading period, suppliers slightly lowered prices, with Lufang, Xiangguang, JCC and others quoted at discounts of 60 yuan/mt to 50 yuan/mt; Zhongjin, Zhongtiaoshan, Tiefeng, OLYDA and others were successively traded at discounts of 90 yuan/mt to 80 yuan/mt; Jinguan, Jinxin and others were successively traded at discounts of 20 yuan/mt to parity.

Copper prices opened lower with a gap in the night session yesterday, and some enterprises placed orders to restock at lower levels. Intraday purchasing demand increased somewhat, but considering that restocking had already been concentrated on the previous day, actual new procurement strength was limited. According to data released by the SHFE on March 19, SHFE copper warrants decreased by 12,200 mt intraday, confirming stronger downstream buying the dip after copper prices pulled back, and the center of spot premiums moved higher accordingly. From the market structure perspective, the import profit window widened slightly, and expectations for subsequent inflows of cargoes from outside China rose, which may put some pressure on the supply side. Overall, amid the tug-of-war between faster destocking and supplier selling, Shanghai spot copper premiums are expected to remain at the current level in the next trading day.