Month-End Trading Was Sluggish, and SHFE Copper Spot Discounts Remained in the Doldrums [SMM Shanghai Spot Copper]

SMM, March 31:

In the morning session, the SHFE copper 2604 contract fluctuated rangebound. It opened at 95,400 yuan/mt. After the opening, prices rose to a high of 95,640 yuan/mt, then pulled back. Prices then repeatedly retreated after rapid rise, touching a high of 95,890 yuan/mt, before entering a weak downward trend and falling to a low of 95,310 yuan/mt, with the closing price at 95,440 yuan/mt. The price spread between futures contracts hovered between a Contango of 50 yuan/mt and a Backwardation of 10 yuan/mt, while the import profit margin for the front-month SHFE copper contract remained in a loss range of 140 yuan/mt to 50 yuan/mt.

Intraday, sales sentiment for copper cathode in Shanghai stood at 2.54, down 0.04 MoM, while purchasing sentiment was 2.39, down 0.09 MoM.. At the start of morning trading, suppliers quoted standard-quality copper at discounts of 70-50 yuan/mt, with offers for brands such as Lufang and JCC at discounts of 60-50 yuan/mt, Daye large plate, Zijin, and Honglu at discounts of 70 yuan/mt, and Jinguan and Jinxin on an ex-works basis at discounts of 60-50 yuan/mt; high-quality copper such as Guixi was quoted at discounts of 40-30 yuan/mt; non-registered copper was quoted at discounts of 200-180 yuan/mt. Entering the second trading period, as market inquiries were limited, suppliers further lowered prices. Standard-quality copper such as Tiefeng, Daye HS, and Zijin was quoted at discounts of 80-70 yuan/mt; for registered SX-EW copper, only some Myanmar cargoes were circulating, quoted at a discount of 120 yuan/mt.

Looking ahead to tomorrow, the Shanghai spot copper market is expected to see a phased recovery. Demand side, as a new monthly procurement cycle begins, previously accumulated purchasing demand from downstream enterprises is expected to be gradually released. Coupled with the stockpiling window ahead of the Qingming Festival, market inquiry activity is likely to rebound, and transactions may improve significantly from month-end levels, providing some support for spot discounts. In terms of market structure, the price spread between high-quality copper and standard-quality copper has remained narrow, reflecting that actual consumption demand still dominates the market, while brand premiums have weakened. Supply side, imported cargoes have continued to arrive recently, and the destocking speed of social inventory in Shanghai has slowed, leaving overall circulating supply relatively ample and limiting the room for spot discounts to recover. Overall, driven by early-month procurement and pre-holiday stockpiling, spot prices against the SHFE copper 2604 contract are expected to see somewhat narrower discounts tomorrow.