Downstream Just-in-time Procurement Spot Premiums/Discounts Rebound [SMM North China Spot Copper]

Looking ahead, spot copper discounts in Shanghai are expected to remain under pressure. Despite some improvement today, supply continues to dominate. Early offers were firm, but weak demand led to sell-offs later, with Tiefeng quoted at a discount of 300 yuan/ton, pulling prices down. A persistent high Contango encourages warrant deliveries, reducing spot liquidity. Ongoing arrivals of imported and domestic copper add to supply. Meanwhile, demand recovery is slow and copper prices remain high, offering little support for premiums. Overall, supply growth continues to outpace demand, keeping the spot market oversupplied.

[Shanghai Spot Copper] Looking ahead to tomorrow, SHFE copper spot discounts are expected to remain under pressure. Although the spot discounts showed some recovery today, the overall market is still constrained by the continuous increase in supply. In the early session, some suppliers were more willing to hold prices firm, with high-quality copper and some parity copper quotes relatively strong, but actual transactions were sluggish. However, in the second trading period, some suppliers began to offload their stocks, with brands like Tiefeng quoting a discount of 300 yuan/mt, pulling down the overall price of parity copper, indicating that supply pressure remains the dominant factor. From a market structure perspective, the high contango spread between futures contracts continues to encourage suppliers to ship to delivery warehouses, which will continue to divert spot liquidity. At the same time, imported and domestically produced copper continue to arrive, with OLYDA and other sources already seen during the day, continuously replenishing the supply side. On the demand side, although resumption of work is progressing, the overall pace of recovery remains slow, coupled with high copper prices, making it difficult to provide effective support for the discounts. Overall, the continuous increase in supply is suppressing demand recovery, and the oversupply situation in the spot market remains unchanged.

Copper is making a comeback globally as electrification, renewable energy buildout, and AI infrastructure demand drive fundamentals.