SMM Feb. 5:
Today, SMM's #1 copper cathode spot prices against the current SHFE copper 2602 contract were quoted at a discount of 100-40 yuan/mt, with the average discount at 70 yuan/mt, up 30 yuan/mt from the previous trading day. SMM's #1 copper cathode prices were 100,260-102,020 yuan/mt. In the morning session, the SHFE copper 2602 contract fell initially and then rebounded slightly, opening at 103,190 yuan/mt. After opening, prices continued to decline, hitting a low of 100,490 yuan/mt, before a slight rebound. The closing price was 101,410 yuan/mt. The Contango spread between nearby contracts ranged from 390-230 yuan/mt, while the import profit margin for the current SHFE copper contract was at a loss of 400-280 yuan/mt.
Both purchasing and sales sentiment improved slightly compared to yesterday. In the Shanghai region, the sales sentiment for copper cathode was 2.73, up 0.09 MoM, while purchasing sentiment was 2.85, up 0.10 MoM.At the beginning of the morning session, spot copper supply in the Shanghai market was tight, and suppliers exhibited strong wait-and-see sentiment. Offers for high-quality copper, including Guixi and Jinchuan (plate), were at discounts of 60-50 yuan/mt, while standard-quality copper was quoted at discounts of 120-60 yuan/mt. A small number of ONSAN offers emerged in the domestic market today, quoted at a discount of 60 yuan/mt. Supply from Japan and South Korea may increase in the near future. Due to scarce supply, Lu Fang, Xiang Guang, etc., were quoted at discounts of 100-90 yuan/mt, while Dajiang PC, Jinchuan ISA, Jin Feng, Yu Guang, etc., were quoted at discounts of 110-100 yuan/mt. Entering the second session, suppliers showed a strong willingness to hold prices firm, and prices stabilized. Spot supply became even tighter. Jin Guan, Tong Guan, etc., were quoted at discounts of 80-60 yuan/mt. SX-EW copper from Myanmar was quoted at discounts of 150-130 yuan/mt, while non-registered brands were traded at discounts of 250-220 yuan/mt.
Looking ahead to tomorrow, the Contango spread between nearby contracts is expected to narrow slightly. Suppliers' willingness to ship to delivery warehouses remains, coupled with some smelters choosing to stockpile for delivery and suppliers' evident reluctance to sell and firm price sentiment, limiting tradable spot supply in the market, which will support the spot discount structure. Additionally, some price-ratio locked cargoes secured during the previous period when the import window was open are expected to arrive gradually, potentially increasing supply in the short term. Overall, spot discounts are expected to narrow slightly further tomorrow.
