Rising Activity in the Henan Copper Cathode Market

Looking ahead, the spot discount for Shanghai copper is expected to continue its slow recovery. With the decline in futures prices, orders from downstream enterprises have increased. In terms of market structure, the C1-C2 price spread has narrowed, which may reduce holders' willingness to deliver to exchange warehouses. On the supply side, continued arrivals of domestic copper and previously price-locked imported copper, coupled with high social inventory levels, ensure ample market circulation. On the demand side, the ongoing resumption of operations at downstream enterprises provides some support for spot premiums and discounts. In summary, spot premiums and discounts are showing a trend of slow recovery and gradual stabilization.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, Shanghai spot copper discounts are expected to continue a mild recovery. Futures prices declined somewhat, and downstream enterprise orders increased. From the market structure perspective, the price spread between futures contracts for the next month and the C contract narrowed, and suppliers’ willingness to ship to delivery warehouse may decline. Supply side, domestic copper and previously price-locked imported cargoes continued to arrive; coupled with social inventory remaining at high levels, overall circulating supply in the market is ample. Demand side, downstream enterprises continued to advance work and production resumptions, providing some support to spot premiums. Overall, spot premiums showed a pattern of slow recovery and gradual stabilization.

[SMM Flash] SHFE copper front-month contract closed at 101,850 yuan/mt at midday, down 580 yuan/mt from the previous trading day. Secondary copper rod in Hubei was quoted at 101,900-102,000 yuan/mt, with an average premium of 100 yuan/mt against the front-month contract. At present, local copper rod enterprises resumed operations at a relatively slow pace, with fewer market offers and overall sluggish trading.