Some suppliers struggled to offload their goods, curbing the recovery momentum; SHFE copper discount narrowed slowly but high prices suppressed transactions [SMM SHFE Copper Spot]

SMM March 2 report:

Today, SMM #1 copper cathode spot prices against the current month 2603 contract ranged from a discount of 290 yuan/mt to 90 yuan/mt, with an average price at a discount of 190 yuan/mt, up 70 yuan/mt from the previous trading day; the average price of SMM #1 copper cathode was 102,250 yuan/mt. In the morning, the SHFE copper 2603 contract first fell then rose, opening at 103,390 yuan/mt, and after continuous declines, it reached a low of 102,310 yuan/mt, then began to rebound, reaching 102,910 yuan/mt, and fluctuated between 102,700 yuan/mt and 102,900 yuan/mt, closing at 102,850 yuan/mt. The Contango spread for the next month was between 470 yuan/mt and 330 yuan/mt, and the import profit margin for SHFE copper in the current month was a loss of 900 yuan/mt to 700 yuan/mt.

During the day, both buying and selling sentiment rose slightly, with the sales sentiment for copper cathode in Shanghai at 2.89, up 0.05 MoM, and the purchasing sentiment at 2.75, up 0.03 MoM. At the beginning of the morning session, suppliers quoted standard-quality copper at a discount of 260 yuan/mt to 100 yuan/mt, with SPCC-ILO, JCC, SUMIKO-N, etc., quoting discounts of 180 yuan/mt to 100 yuan/mt, and Zhongtiaoshan, Jinchuan ISA, Zhongjin, Zijin, OLYDA, Honglu, Yuguang, etc., quoting discounts of 260 yuan/mt to 200 yuan/mt; high-quality copper Guixi and Jinchuan (plate) were quoted at discounts of 100 yuan/mt to 80 yuan/mt. In the second period, some suppliers started to offload their stocks, with Tie Feng quoted at a discount of 300 yuan/mt, leading to a significant drop in the price of standard-quality copper, which was quoted at discounts of 310 yuan/mt to 140 yuan/mt, with SPCC-ILO, Lufang, JCC, SUMIKO-N, etc., quoting discounts of 230 yuan/mt to 140 yuan/mt, and Jinchuan ISA, Jinguan, Zhongjin, Yuguang, Jinxin, etc., quoting discounts of 280 yuan/mt to 250 yuan/mt, while Tie Feng and Zhongtiaoshan, etc., were quoted at discounts of 300 yuan/mt to 280 yuan/mt; high-quality copper was quoted at discounts of 120 yuan/mt to 100 yuan/mt. Registered SX-EW copper was scarce, with only some Myanmar sources available, quoted at discounts of 320 yuan/mt to 300 yuan/mt, while unregistered SX-EW copper MOOK traded at a discount of 400 yuan/mt, and non-registered SX-EW copper traded at discounts of 360 yuan/mt to 350 yuan/mt.

Looking ahead, spot discounts for SHFE copper are expected to remain under pressure. Although spot discounts improved today, the overall market is still constrained by the continuous increase in supply. In the morning, some suppliers showed a strong intention to hold prices firm, with high-quality copper and some standard-quality copper being relatively firm, but actual transactions were sluggish. However, in the second period, some suppliers began to offload their stocks, with brands like Tie Feng quoted at a discount of 300 yuan/mt, pulling down the overall price of standard-quality copper, indicating that supply pressure remains the dominant factor. From the market structure perspective, the price spread between futures contracts remains high, and suppliers continue to ship to delivery warehouses, which will continue to divert spot liquidity; at the same time, imported and domestically produced copper continues to arrive, with OLYDA and other sources already seen during the day, continuously supplementing the supply side. On the demand side, resumption of work is ongoing, but the overall pace of recovery remains slow, coupled with high copper prices, making it difficult to effectively support discounts. In summary, the increase in supply continues to suppress demand recovery, and the oversupply situation in the spot market remains unchanged.