Copper price pullback activates buying to digest low-priced cargoes, and suppliers hold prices firm, supporting a narrower discount [SMM Shanghai Spot Copper]

SMM June 24:

In the morning session, the SHFE copper 2607 contract moved lower first and then higher. It opened at 101,430 yuan/mt. After the open, prices pulled back slightly, dipping to an intraday low of 100,880 yuan/mt, then stabilized and began to rebound, closing at 101,400 yuan/mt. The price spread between futures contracts ranged from contango of 10 yuan/mt to backwardation of 60 yuan/mt. The import profit margin for SHFE copper against the 2607 contract for the current month ranged from a loss of 130 yuan/mt to a loss of 20 yuan/mt.

Intraday, in Shanghai, the selling sentiment for copper cathode was 2.8, down 0.09 MoM, while purchasing sentiment was 2.93, up 0.16 MoM; historical data can be queried in the database. Early in the morning session, suppliers’ first round of offers quoted standard-quality copper at discounts of 70 yuan/mt to 30 yuan/mt, with JCC, Lufang and others at a discount of 30 yuan/mt, and Dajiang PC, Tiefeng, Zhongtiaoshan and others at discounts of 70 yuan/mt to 50 yuan/mt. Suppliers then further lowered quotes: Tiefeng, Zhongtiaoshan and others were quoted at discounts of 80 yuan/mt to 70 yuan/mt; Jinguan, Jinxin, Jintun PC, and Jinfeng were quoted EXW at parity; high-quality copper Jinchuan (plate) and Jintun (plate) were quoted at premiums of 10 yuan/mt to 20 yuan/mt; registered SX-EW copper such as BMK was quoted at discounts of 80 yuan/mt to 60 yuan/mt. Trading was fairly brisk, with some low-priced cargoes transacting quickly. Entering the second time window, low-priced cargoes were hard to find in the market, and suppliers’ willingness to hold prices firm began to emerge. Non-registered copper traded at discounts of 180 yuan/mt to 150 yuan/mt.

Looking ahead to tomorrow, copper prices pulled back in yesterday’s night session, and some downstream enterprises actively fixed prices at lower levels. Intraday procurement demand rose notably. After low-priced cargoes were quickly absorbed, suppliers’ willingness to hold prices firm became more evident, and the momentum to sell at low prices weakened thereafter. From the market structure perspective, the price spread between futures contracts has shifted to a backwardation structure, with reduced willingness to sell at low prices, providing support for spot discounts. Supply side, the import window briefly opened during the night session, and there may be additional ex-China cargoes later. Overall, supported by the backwardation structure and downstream buy-the-dip activity, Shanghai spot copper prices against the 2607 contract are expected to remain at a discount tomorrow, with the discount potentially narrowing slightly.