As contract rollover approaches, Shanghai spot copper remains on par with parity, with caution advised against a renewed widening of the price spread between futures contracts [SMM Weekly Review of Shanghai Spot Copper]

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        >During the week, the supply of imported copper continued to replenish, with various sources of goods circulating in the Shanghai spot market. However, the mainstream supply was tight due to trade circulation needs, leading to a significant price spread between different brands of spot copper transactions during the week. Nevertheless, both inventory and futures warrants continued to show destocking. The downstream sector's ability to purchase at low premiums was moderate, which could also be verified by the recent operation rates of copper semis. Looking ahead to next week, as the contract rollover of SHFE copper 2506 approaches, there is still a gap between the current open interest and the existing warrants. Moreover, with a BACK price spread between futures contracts of only 100 yuan/mt and smelters having export intentions, the deliverable supply that can be organized in the market next week will be limited. Be cautious of the risk of the price spread between futures contracts widening again.

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