Copper Supply to Rise, Spot Discounts Under Pressure Amid Supply-Demand Mismatch

【SMM Copper Cathode Rod Express】The operating rate of the copper cathode rod industry increased by 6.42 percentage points WoW this week, with the industry's resumption progress remaining relatively slow. Looking ahead to next week, the industry is expected to achieve a full-scale resumption, and SMM forecasts the operating rate will rise by 39.59 percentage points MoM to 57.97%.

[Shanghai spot copper] Looking ahead to next week, spot copper supply continues to increase, with Peruvian and Japanese cargoes visible intraday. From a market structure perspective, the contango spread between nearby futures contracts has widened slightly, and suppliers' willingness to ship to delivery warehouses persists, further diverting spot liquidity. Although suppliers showed strong intentions to hold prices firm intraday, with some brand quotations remaining stable, expectations of subsequent warrant outflows remain, which will exert further pressure on spot premiums/discounts. On the demand side, downstream sectors have not fully resumed production, and procurement sentiment, while rebounding, remains cautious. Under the supply-demand mismatch, social inventory continues its buildup trend. Overall, with supply pressure dominating, spot discounts are expected to remain under pressure next week.