SMM Feb 25:
Today, SMM's #1 copper cathode spot prices against the current month 2603 contract were quoted at a discount of 280-80 yuan/mt, with the average discount at 180 yuan/mt, down 430 yuan/mt from the previous trading day; SMM's #1 copper cathode prices were 101,690-102,440 yuan/mt. In the morning session, the SHFE copper 2603 contract first rose, then fell, and then rose again. The opening price was 101,840 yuan/mt. After opening, the price rose to 102,400 yuan/mt, then dropped slightly to 101,950 yuan/mt, before rising again to a high of 102,550 yuan/mt. Overall, it fluctuated between 102,300-102,500 yuan/mt, closing at 102,380 yuan/mt. The Contango spread between adjacent months was 390-340 yuan/mt. The import profit margin for the current month's SHFE copper contract ranged from a loss of 470-390 yuan/mt.
Intraday, both purchasing and sales sentiment increased significantly. The sales sentiment for copper cathode in the Shanghai region was 2.77, up 0.68 WoW, while the purchasing sentiment was 2.55, up 0.47 WoW. Early in the morning session, suppliers showed strong wait-and-see sentiment. Standard-quality copper was quoted at a discount of 250-150 yuan/mt, with Jinchuan isa, Jinguan, and Zhongtiaoshan quoted at a discount of 240-220 yuan/mt. High-quality copper from Guixi and Jinchuan (plate), due to scarce supply, had firm quotes at a discount of 110-60 yuan/mt, with Jinchuan (plate) traded at a discount of 110 yuan/mt. Entering the second session, as market supply increased, suppliers further lowered prices. High-quality copper was quoted at a discount of 100-110 yuan/mt. Standard-quality copper was quoted at a discount of 300-200 yuan/mt. Among them, Xiangguang, due to scarce supply, was quoted at a discount of 200 yuan/mt, while Zhongtiaoshan and Yuguang were traded at a discount of 300-260 yuan/mt. SX-EW copper from Myanmar was quoted at a discount of 320-300 yuan/mt, and non-registered brands were traded at a discount of 450-400 yuan/mt.
Looking ahead to tomorrow, today was the first trading day after the SHFE copper 2603 contract rollover, leading to a significant adjustment in spot quotes due to the contract switch. From the actual market performance, both supply and demand sides showed signs of recovery. Supply side, cargoes locked in during the previous open import window continued to supplement the domestic market, coupled with the gradual release of warrants not matched for delivery, keeping the overall circulating supply at high levels. Demand side, as the Chinese New Year holiday ended, some downstream enterprises began to resume production and gradually entered the market for inquiries and purchases. Intraday purchasing and sales sentiment significantly rebounded compared to the previous trading day. It is worth noting that although supply and demand are recovering simultaneously, the release of supply increments is more direct, especially the outflow of warrants not matched for delivery, which will put pressure on spot premiums/discounts. Meanwhile, the contango structure in deferred months indicates that suppliers still have the intention to ship to delivery warehouses for forward months, which will divert some of the available spot cargo and provide some support to the discount level. Overall, the market is in the initial stage of post-holiday supply-demand rebalancing, and spot discounts are expected to remain under pressure tomorrow.
