The Price Spread Between High-Quality Copper and Standard-Quality Copper Continued to Narrow, While SHFE Copper Spot Discounts Gradually Stabilized [SMM Shanghai Spot Copper]

SMM News, March 26:

In the morning session, the SHFE copper 2604 contract opened lower with a gap and then continued to decline. It opened at 96,250 yuan/mt, then quickly fell to 95,790 yuan/mt after the opening. Prices subsequently kept declining to 95,450 yuan/mt, rebounded slightly, and then extended the downtrend to a low of 95,070 yuan/mt, before closing at 95,160 yuan/mt. The price spread between futures contracts stood between a Contango of 30 yuan/mt and a Backwardation of 10 yuan/mt, while the import profit margin for the SHFE copper front-month contract ranged from a loss of 90 yuan/mt to a loss of 40 yuan/mt.

During the day, sales sentiment for copper cathode in Shanghai was 2.74, down 0.03 MoM, while procurement sentiment was 2.57, up 0.02 MoM. . At the start of morning trading, suppliers quoted standard-quality copper at discounts of 130-80 yuan/mt, with JCC, Lufang, Xiangguang and others quoted at discounts of 130-100 yuan/mt, while Dajiang PC, Jinchuan isa, Zhongtiaoshan, Tiefeng, Zijin, Honglu and others were quoted at discounts of 80-70 yuan/mt; high-quality copper such as Jinchuan (plate) and Jintun (plate) was quoted at discounts of 70-60 yuan/mt. Non-registered copper was quoted at discounts of 200-180 yuan/mt. In the second trading period, suppliers quoted Jinguan, Jinxin, Jintun pc and other factory-delivered cargoes with invoices dated this month at a discount of 100 yuan/mt. Subsequently, some suppliers slightly raised prices, showing willingness to hold prices firm, with Zhongtiaoshan, Yuguang, Dajiang HS and others quoted at a discount of 120 yuan/mt, and low-priced cargoes were hard to find in the market. Non-registered copper was traded successively at discounts of 210-200 yuan/mt.

Looking ahead to tomorrow, the Shanghai spot copper market is expected to maintain a tug-of-war pattern. Supply side, according to SMM, a large volume of non-registered copper is expected to see concentrated arrivals next week, though actual arrivals still need further observation, and short-term supply pressure remains. Against the current backdrop of high inventory, spot cargoes available in circulation are relatively abundant, and most suppliers show strong willingness to sell, leaving spot discounts continuously under pressure. However, some suppliers have already begun to show an intention to hold prices firm. If discounts widen further, suppliers may choose to ship to delivery warehouse rather than continue selling at discounts, providing some support to the lower bound of discounts. Demand side, some downstream enterprises saw increases in order-taking and shipments for this month, creating rigid demand for spot cargoes with invoices dated this month, but such cargoes remain relatively hard to find in the market. In addition, the price spread between high-quality copper and standard-quality copper remains narrow, indicating that actual consumption demand has become the dominant market driver. Overall, spot discounts have limited room to fall further, but upside is also constrained by high inventory and expectations for imported arrivals. Shanghai spot copper against the 2604 contract is expected to remain at the current discount level tomorrow.