Copper prices surge, but price spread between futures contracts struggles to widen; downstream procurement is constrained, with sluggish trading [SMM Shanghai spot copper]

SMM News on June 10:

        Today, the spot price of SMM #1 copper cathode against the current-month 2506 contract was reported at a premium of 20-150 yuan/mt, with an average quoted premium of 85 yuan/mt, unchanged from the previous trading day. The SMM #1 copper cathode price ranged from 79,160 to 79,390 yuan/mt. The SHFE copper price for the next-month contract surged to 79,560 yuan/mt on the back of favourable macro front, before paring gains. In the morning session, the SHFE copper price fluctuated rangebound between 79,130 and 79,330 yuan/mt, closing at 79,220 yuan/mt in the morning. The price spread between futures contracts for the next-month contract fluctuated between 60-100 yuan/mt, while the import loss for the current-month SHFE copper contract widened to over 1,400 yuan/mt.

        In the morning session, suppliers quoted prices for brands such as Xiangguang, Lufang, and JCC at a premium of 120 yuan/mt, with transactions later concluded at a premium of 80-100 yuan/mt. Quotations for SMM standard-quality copper were 20-50 yuan/mt above the average price, with the market remaining cautious about purchase activities the next day. Brands such as Tiefeng, imported Jinguan, Jinfeng, and Jintun pc were traded at a discount of 0-20 yuan/mt, with downstream buyers showing low enthusiasm for purchases. Non-registered copper supplies, even when traded at a discount, struggled to attract significant downstream purchases, as the surge in copper prices strongly suppressed purchasing sentiment.

        Looking ahead to tomorrow, with the contract expiry approaching and no improvement in the price spread between futures contracts, downstream purchases are expected to remain subdued amid high copper prices, resulting in generally weak trading activity. However, given the significant disparity between open interest and the current stock of warrants, warrants are expected to increase gradually in the latter half of the week.